AUD/USD Price Forecast – Australian Dollar Pulls Back From 50 Day EMA

The Australian dollar has pulled back a bit during the trading session on Friday, slicing through the 50 day EMA again. It now looks as if we are going to go looking towards the 0.71 handle, and then the 0.70 level. While I do think that we have more negative pressure ahead of us than positive, there is so much support underneath that I need to see the most recent low at the 0.70 level broken to start selling. At this point, I believe that the market is trying to break down a bit, but quite frankly if I am going to buy the US dollar, I can do it against other currencies that are much more susceptible to weakness than the Aussie.

AUD/USD Video 05.10.20

Keep in mind that the Australian dollar is highly levered to China, and that gives a little bit of resiliency that other currencies do not have. Furthermore, gold is also supportive of the Australian dollar if it starts to rally in a fear-based trade, so although this market is probably very unstable, I will use it more or less as an indicator. I think of it this way: if the US dollar is going to suddenly strengthen drastically, then I am looking to buy the US dollar against Euro, Pound, and other currencies. The Australian dollar on the other hand could be a good bargain in this general vicinity of all of the sudden we see the US dollar falling. That being said, there is a lot of risk out there.

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