AUD/USD Weekly Price Forecast – Australian Dollar Drifts Lower for the Week
The Australian dollar has fallen a bit during the course of the trading week to drop below the 200 week EMA. More importantly, we have also pierced the 0.73 level which had been major support. If we continue to drop from here, is very likely that we will go looking towards the 0.71 handle, where we bounced from about a month ago. Because of this, I think there would be a certain amount of interest in that area, extending down to the 0.70 level. That being said, this is a market that has a lot of external influence from China, so pay close attention to what is going on there. There is the possibility that the Chinese mainland is about to suffer a bit of a hit due to the Evergrande default.
AUD/USD Video 20.09.21
At this point, I think that the next week or two will end up being very crucial. If we break down below the bottom of this week, then it is likely that we could go looking towards the 0.71 handle. However, if we turn around a break above the top of the candlestick for the week, then it is likely that we go looking towards the 50 week EMA, even the 0.75 level above which is a large, round, psychologically significant figure.
Keep in mind that this pair is highly sensitive to risk appetite, and therefore the Aussie could be thrown around by a lot of different things, and not just the Chinese real estate issue. That being said, the US dollar is a safety currency, so if we see the US dollar picking up steam, it is very possible that we could be talking about a run towards the US bond market and therefore safety.
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