The Australian dollar initially fell during the course of the trading session on Friday only to turn around and show signs of stability. At this point, I believe that the market continues to try to rally but there is a significant amount of resistance above. The 0.74 level is the beginning of significant resistance that extends all the way to the 0.75 level above. Signs of exhaustion would be something that I would sell into and press to the downside.

AUD/USD Video 26.07.21

The fact that we have continued to try to rally into the weekend suggests to me that the market is more than likely going to try to stabilize before they can start shorting again. I have no interest in buying this pair and it is also worth noting that the so-called “death cross” is coming into the picture, as the 50 day EMA is dropping towards the 200 day EMA. The 200 day EMA sits just above the 0.75 level, making it even more important than typical large, round, psychologically important levels. All things being equal, I think that the market is going to go down to the 0.70 level unless something changes with the Australian economy.

After all, Australia continues to lock itself down and therefore economic activity will obviously suffer. Furthermore, the Chinese economy is showing signs of stress as well, so that obviously will have an influence on the Australian dollar as well. With that being the case, the market is likely to continue to see noisy behavior.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE:

• Natural Gas Price Prediction – Prices Rise Drive by Strong Power Demand

• Silver Weekly Price Forecast – Silver Markets Pull Back to 50 Week EMA

• USD/CAD: Loonie Falls for Second Straight Day on Subdued Oil Prices

• AUD/USD Weekly Price Forecast – Australian Dollar Bounces From 200 Week EMA

• USD/CAD Daily Forecast – Canadian Dollar Declines Against U.S. Dollar

• S&P 500 Weekly Price Forecast – Stock Markets Continue to Plow Higher