AUD/USD PRICE OUTLOOK: AUSTRALIAN DOLLAR DROPS SHARPLY TO TECHNICAL SUPPORT AMID VOLATILITY FLAREUP
The Australian Greenback got here beneath hearth Monday as markets swooned on the again of rising danger aversion. Sentiment-linked AUD/USD value motion plunged 120-pips from Friday’s shut, however the main forex pair has since clawed again practically 1 / 4 of the transfer with Aussie bulls defending a key help zone across the 0.7200-handle.
| Change in | Longs | Shorts | OI |
| Every day | 23% | -15% | 1% |
| Weekly | 12% | -14% | -2% |
AUD/USD PRICE CHART: DAILY TIME FRAME (26 MAY TO 21 SEP 2020)
Regardless of a notable aid bounce off this degree staged throughout late commerce, the Aussie-Greenback nonetheless notched an in depth beneath its 50-day transferring common. This might improve potential for a retest of the 0.7200-price degree underpinned by month-to-date lows. A breakdown of this crucial technical barrier, if confirmed with follow-through, elevates the chance of a change in medium-term development from bullish to bearish. Taking out the 08 September intraday swing low may trigger AUD/USD value motion to speed up decrease towards channel help earlier than the 0.7000-level comes into focus as one other potential draw back goal.
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AUD/USD PRICE CHART WITH VIX INDEX OVERLAID: DAILY TIME FRAME (DEC 2019 TO SEP 2020)
Chart created by @RichDvorakFX with TradingView
The professional-risk Australian Greenback may additionally face heightened promoting stress if the VIX Index, or fear-gauge, continues snapping larger as market sentiment deteriorates additional. That stated, commentary from Fed Chair Powell due later this week may speak down the US Greenback with the prospect of extra financial intervention. However, if the upcoming launch of world PMI knowledge disappoints, danger aversion may get reignited and steer AUD/USD value motion decrease.
Preserve Studying – USD Worth Outlook: US Greenback Ripping Greater as Markets Swoon
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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