The Australian dollar has broken down significantly during the trading session on Wednesday, reaching towards the 0.71 level, which is the beginning of 100 points worth of support that extends down to the crucial and big figure of 0.70 below. This is an area that should be massive support, so at this point I would anticipate that we could see a bit of buying sooner or later, but it should be noted that the US dollar has seen a lot of strength during the day, so we could very well continue the move lower. Having said all of that, if I am looking to buy the US dollar, I will probably do it against other currencies, not necessarily the Australian dollar which has been so strong.
AUD/USD Video 24.09.20
If we do break down below the 0.70 level, then it will be a complete trend change just waiting to happen. That being said, by then I will already be long of the US dollar against several other currencies, so this is essentially a “long only” pair at the moment. Remember that the Australian dollar is highly sensitive to the Chinese economy, and sometimes gold so it is very likely that we will see a bit of resiliency. With that in mind, if the US dollar does start to lose its strength, this will be the first place I will be looking to short the greenback. The 200 day EMA is currently just above the 0.69 level and rising, so pay attention to that as well. A break down below there could open up the floodgates.
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This article was originally posted on FX Empire