The Australian dollar initially tried to rally during the trading session on Wednesday but continues to struggle with the 0.7350 level. I think part of this comes down to the fact that we are very concerned about the Reserve Bank of Australia, and the fact that it is very likely that we will see quantitative easing and perhaps even negative interest rates. That is going to be the case, it is likely that the Aussie dollar will continue to struggle. Do not get me wrong, it is also a “risk on currency”, and we certainly have a lot of risk on out there right now. This is part of what is keeping this market buoyant, so that is something to keep in mind.
AUD/USD Video 12.11.20
Underneath, the 50 day EMA offers support, sitting near the 0.7150 level. Underneath there, we could see a strong amount of support between the 0.70 level and the 0.71 handle as it is a “zone of support.” Looking at the 200 day EMA sitting just below the 0.70 level, that also gives credence to that area offering quite a bit of support. This is why think that if we break down below there it would be a complete trend change in this market would fall apart. In the short term though, I believe that we are more than likely going to be stuck in some type of range between 0.70 and 0.73 for the time being.
I believe that the world is still trying to figure out what to do about the virus as well, even though there is supposedly a vaccine coming.
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