 Good morning and welcome to the chart of the week video with me. David Madden Today's date is 30 the 3rd of September 2020 and the time has just gone 11 29 British summer time and this week's chart of the week is the Australian dollar versus the US dollar or the Aussie dollar as often gets referred to as it's been a solid upper trend since the since the middle of March and only a few days ago we're not to hit its highest level in basically two years in the last two sessions it has moved a bit lower partial to do with the rebound in the US dollar index as a whole but also on the back of the worst unexpected GDP numbers out of Australia Australia is now in a recession its first recession in nearly 30 years but given what's gone on with COVID-19 that's no no surprise there and this video is going to be about link a potential price action of the currency fare so the move to the upside has been exceptionally strong it's retreated a small bit from the two-year high we could see here the positive momentum is fading off if you do move lower from here work we potentially find support so if we do move lower from this this area we could head back down toward the kind of the 70 72 area potentially back down to this blue line here the 50 moving average we can see that there's a bit of consolidation around that area back in April also if you look at the level of the 50 52 50 day moving average it comes in the play in around zero spot 71 13 which is kind of around the bouts there about that zone acted as support in early August and if a few metrics kind of overlap or a few price points overlap that makes it more significant because some people we've been looking out for the recent lows other people we've been looking out for the moving out for moving averages so that area is a whole could act a support and even if you go below that we could head back down towards the kind of towards the kind of big number of zero spot 70 we can notice here when the market was moving higher just north of zero spot 70 active resistance as well in around zero spot 70 37 so that entire zone of zero spot 70 40 zero spot 70 has also kind of been significant in the last few months so these are the potential areas we could see for support should we move move lower in the Aussie dollar Australian dollar versus the US dollar if you do move to the upside and if the wider trend continues and if you take out the recent highs of just north of zero spot 74 we could find ourselves heading back up heading back up towards zero spot 74 78 a pilot yes zero spot 74 78 which is this is zone here it's kind of enacted as both support in March 2018 and also that area broadly speaking active resistance in a few occasions in July 2018 so that area what was a very significant over two years ago so it could be a significance in the near term like I said the wider trend is to the upside so although we are seeing some signs of some bearish moves in the last few sessions you know this could be a case of we have a pullback towards zero spot 72 or to the 50 moving average or even down to zero spot 70 before resuming the wider upward trend that's been in place for the last number of months we cannot ignore the wider picture now if you are going to be trading the Australian dollar versus the US dollar or any dollar crosses keep an eye off for what's going on on the US dollar index this the dollar index here of the September contract I have a daily chart I've already struck and highlighted Tuesday's daily candle which has the potential to be a hammer formation whereby fell to a 28 month low but are rebounded from there it's been pushing higher since so this could be the beginning of a turnaround in the US dollar and if that is the case that could see downward pressure on the Australian dollar versus the US dollar keep an eye out for this area here the zero spot at the 94 metric on the dollar index chart just because there's been a few occasions in the past month or so when the dollar index try to break try to rebound a kind of shake off the wider negative trend but it's always failed so if we do have a break above 94 that could be that could be an indication that you know what the bearish trend in the dollar is potentially coming to an end and if that is a case that could mean further pressure on the Australian dollar versus US dollar conversely if the dollar index does what it's been doing the last few weeks whereby has a rally and then turns over on itself if you do turn over on ourselves and then take out the most the more recent lows that could be a sign that the wider upper trend in the Australian dollar versus the US dollar is going to continue also just worth noting today at 13 30 British summer time we have some important data of the US we have the jobless claims number and tomorrow we have the all important non-farm payrolls report in fact I'm hosting a live webinar tomorrow so that that's Friday the 4th of September at 13 15 British summer time I'll be covering a webinar for that so please feel free to sign up thank you for listening stay safe have a good trading week and good luck