AUD/USD Price Forecast – Australian Dollar Getting Stretched

Christopher Lewis
·2-min read

The Australian dollar initially tried to rally above the 0.70 level, an obvious psychologically important figure. There is a lot of noise in this area, and therefore it makes sense that we could see some type of pullback from here. Quite frankly, markets cannot go straight up in the air forever, despite how they have been acting. Because of this, I believe that the market is on the wrong side a bit, and overdone. Ultimately, the market is likely to see a lot of issues in this area, and at this point in time it is likely that the resistance will continue to be difficult to deal with.

AUD/USD Video 08.06.20

To the downside, I would anticipate that the 200 day EMA, closer to the 0.6675 handle, could offer quite a bit of support. A breakdown below that level then could open up fresh selling. To the upside, if we can clear the 0.71 level, then it is likely that the market will completely change the longer-term trend, and possibly go looking for another 1000 pips, albeit in a slower move than what we have seen would be my guess.

The Australian dollar of course continues to be highly levered to the global trade situation and having said that it will follow a lot of overall economic noise. Having said all of this, from a purely mechanical standpoint the Australian dollar is far too overbought to get excited about buying here. Quite frankly, if you are buying the Aussie dollar up at this region, you might make money, but you surely have much more risk to the downside than up.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE:

  • Up next
  • Up next
  • Up next
  • Up next

Latest stories