AUD/USD Price Forecast – Australian Dollar Pulls Back

The Australian dollar has fallen a bit during the trading session on Friday, reaching towards the 0.65 level as we started to head into the weekend. Ultimately, this is a market that I think continues to see a lot of volatility and it should, considering that the Australian dollar is so highly levered to China, and recently we have seen a lot of barbs between Canberra and Beijing. Beyond that, there are a lot of concerns when it comes to the overall global growth scenario, and of course the US dollar is quite often looked at as a way to protect wealth.

AUD/USD Video 25.05.20

With that in mind, it also looks as if we are trying to form some type of “rounding top”, which is a reversal signal. Beyond that, we also have the 200 day EMA above that should offer plenty of resistance, so I think it is only a matter of time before we rollover completely. However, the Australian dollar has been extraordinarily resilient for some time and it is difficult to think that we are simply going to break apart. Because of this, I will continue to fade short-term rallies, recognizing that a move below the 50 day EMA is what is needed for a bigger drop. I do believe that eventually happens, but it may take some time. On the other side of the equation, if we were to break above the 200 day EMA on a daily close, especially if it breaches the 0.67 handle, that would be an extraordinarily bullish sign and could send this pair into overdrive.