AUD/USD Forecast 21/10: Bulls Eye 0.7050 Breakout (Video)

(MENAFN- Daily Forex) The Australian dollar continues to attempt a recovery, as interest rates in the US are dropping. Can it continue? This will be something I am watching today.

AUD/USD

The Aussie dollar has rallied a bit during the early part of the trading session on Tuesday, as it looks like we are trying to break out to the upside.

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That being said, I see the 50-day EMA above at the 0.7035 level, offering a little bit of resistance at the moment. The markets continue to see a lot of questions asked about whether or not the market can break above there, as the interest rate differential still favors the United States.

RBA to turn dovish? We will see, with employment unraveling.

There are questions about whether or not the Australians may have to loosen monetary policy. For the longest time, we had been seeing hints that the RBA would tighten, but those jobs numbers that came out last week were miserable. So, we'll have to see whether or not the interest rate differential comes back into play

It is worth noting that U.S. rates dropping during the session, and really over the last couple of sessions, has given the Aussie a new lease on life. Right below the 50-day EMA, we have an area of supply that I think traders will continue to watch.

If we can break above the 0.7050 level, then I think the Aussie continues to climb, perhaps just trying to stay in the same consolidation area it has been in for about a year, between 0.6850 on the very bottom and the 0.7250 level on the top.

EURUSD Chart by TradingView

Ultimately, this is a market that I'll be watching very closely over the next 30 pips or so to see if we can break out and continue.

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