AUD/USD Weekly Price Forecast – Australian Dollar Goes Parabolic Into ResistanceThe Australian dollar went parabolic during the week, crashing into resistance at the 0.70 level. This is a market that at the very least needs to digest gains.
AUD/USD Video 08.06.20
The Australian dollar has exploded to the upside during the week, gaining roughly 300 pips. However, we are looking at a market that is struggling with the 0.70 level, so it does make sense that we may pull back a little bit from here. It is possible that people are starting to factor in the idea of interest rates in the United States not necessarily going negative, and if that is the case, we could see a sudden rush back into the US dollar.
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Regardless, this is a market that is overstretched by just about any metric you use, so I find it difficult to go long here. If we break above the 0.71 level, then you cannot fight the momentum anymore, but quite frankly I think even if you are bullish of this market, you need to see some type of pullback in order to offer value and more importantly an opportunity to pick up enough buying pressure to push this market higher.
If the market were the wipeout this weekly candle, it would be extraordinarily bearish, and we could go crashing right back down. That being said, I would not put anything past this market right now because the volatility is out of control, not only in the Australian dollar but in just about anything else I look at. This type of volatility is going to cause major problems, and therefore everything can turn on a dime. With that in mind, I am very hesitant to start buying here, especially considering just how far we have come in such a short amount of time. Because of this, I think that the pullback is necessary.
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