AUD/USD Price Forecast – Aussie Dollar Sitting On Top of Support Zone

The Australian dollar has dipped slightly during the trading session on Friday as we head into the weekend. We have seen a significant turn in the overall attitude of risk appetite out there, and of course the expectations of stimulus coming out of the United States. Because of this, the market has changed its trajectory, and recently we had retested the previous uptrend line that was so supportive. At this point, it becomes a question of whether or not the Australian dollar can continue to go higher, or is it doomed to fail?

AUD/USD Video 19.10.20

At this point, the market it is crucial to pay attention to the 0.70 level because not only is it a large, round, psychologically significant figure, but it is also the area where the 200 day EMA is racing towards. When we get down to that area on a pullback, the market will need to put serious work into breaking down, but if we do in fact break down from there it is likely that the Australian dollar will drop another couple of handles. The velocity will of course pick up as well, as the trapdoor will have opened. However, if we were to turn around and rally from here, I think we still need to look at the 0.73 level as major resistance. That is not only a large, round, psychologically significant figure but it is also where the uptrend line that we previously paid so much attention will coincide.

Keep in mind that the market is very sensitive to risk appetite, and quite frankly there are a minefield of problems out there just waiting to jump in and push the markets around.

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