The Australian dollar has gone back and forth during the trading session on Monday to show just how confused this market is. That being said, I also believe that the market is likely to see a lot of confusion based upon risk appetite in global markets overall. After all, the US dollar is favored for safety in general, and of course it is likely that we continue to test the support region underneath between the 0.71 handle and the 0.70 level.
AUD/USD Video 27.10.20
The 200 day EMA underneath could offer a significant amount of support as well, which is just below the 0.70 level. That of course is a large, round, psychologically significant figure so it would make quite a bit of sense that people will be paying attention to that general vicinity. If we break down below there, then it is likely that the market goes looking towards the 0.68 level which is a massive support level from previous trading. Once we get down below there, the bottom will completely fall out.
To the upside, I believe that the 0.73 level will offer resistance, as it has been a scene of significant supply previously. Ultimately, this is a market that continues to chop back and forth. This is a market that I think is simply going to chop around with more of a downward overall proclivity as the market is likely to see plenty of reasons to be concerned over the next week or so. If we were to somehow break above the 0.73 level, we would almost certainly have to have some type of news involving stimulus in the United States.
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This article was originally posted on FX Empire