AUD/USD Price Forecast – Australian dollar fails to hang onto gains

The Australian dollar initially tried to rally during the trading session on Wednesday but found the 50 day EMA to be a bit too resistive. If we can break above that level, then I think the market probably will continue to go to the 0.7250 level. That’s an area that also coincides with the 200 day EMA, so that will cause a lot of trouble. If we do break up above that level, then we could continue to go much higher. Remember that this pair is highly levered to the Chinese economy, which quite frankly is struggling a bit. Beyond that, we have the US/China trade relations deteriorating, so it’s likely that the Aussie will struggle a bit.

AUD/USD Video 24.01.19

That being said, I recognize that there is a massive amount of support at the 0.70 level that extends down to the 0.68 level after that. That’s an area that has been massive support on longer-term charts as well, so I think at this point pullbacks will be buying opportunities, but obviously if it’s going to be a bottoming pattern it’s going to take a lot of work to make that happen, and of course a lot of time. If we were to break down below the 0.68 handle, then the market goes much lower, perhaps reaching towards the 0.65 handle next. That being the case, it’s likely that we will see a huge fight underneath so I think the downside is somewhat limited, and therefore I would be looking for support of action more than anything else.

This article was originally posted on FX Empire

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