AUD/USD Price Forecast – Australian Dollar Looking Confused

The Australian dollar has gone back and forth during the trading session on Wednesday as we continue to bounce around in the massive resistance barrier between 0.7250 and the 0.7350 level. Ultimately, this is a market that I think continues to see a lot of back and forth, and it is obvious that there is a significant amount of resistance above that continues to cause major problems. With this being the case, the Australian dollar is very likely to continue to go back and forth, perhaps breaking back down towards the 50 day EMA.

AUD/USD Video 19.11.20

The Reserve Bank of Australia of course has recently stated that monetary policy was going to be extraordinarily loose, and of course there is the possibility that we could be looking at negative interest rates going forward. All things being equal, I think that the market is simply trying to figure out what to do next and therefore it is likely that we see more confusion than anything else. With this, I like the idea of trading short-term range bound trades with small positions more than anything else. However, if we were to break down below the 0.70 level, and by extension the 200 day EMA, then things change but until then we are essentially stuck in this very tight trading range.

Keep in mind that the US dollar is getting hammered due to the idea that the Federal Reserve is going to do some type of massive stimulus that should cause the US dollar to lose value. With this, the likelihood of clarity seems to be very small due to the fact that both central banks are going to work against the value of their currencies.

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