AUD/USD Forecast: Australian Dollar Bounces from Swing Low

Christopher Lewis

Looking at this chart, I think a short-term bounce probably would be the best opportunity that we could see going forward. 

The Australian dollar fell a bit during the trading session on Wednesday as we awaited the Federal Reserve. The Fed came out with its statement and Jerome Powell and his press conference has a lot to do with where we go next. The fact that the market has shown itself to form a bit of a hammer suggests that we may get a little bounce. That bounce is something that I will be looking at shorting, as this market has been in a downtrend.

I see the 0.74 level as a potential barrier, but I think there is a much bigger argument to be made for selling near the 0.75 handle. The 0.75 handle is a large, round, psychologically important figure that will attract a lot of headline attention. It should be noted that the 50-day EMA is starting to reach towards the 200-day EMA, forming the so-called “death cross”, something that is a very negative longer-term signal. In fact, I think that area will be massive resistance that will offer a bit of a barrier.

On the other hand, if we were to break down below the 0.73 handle, then it is likely that the market could drop towards the 0.72 handle. Longer term, it is very likely that we could go looking towards the 0.70 level, which is a huge area on the longer-term charts as well. If we were to break down below there, that would be catastrophic for the longer-term attitude of this market.

On the other hand, if we were to turn around and break above the 0.75 handle significantly, then it could send the market looking towards the 0.78 level. Looking at this chart, I think a short-term bounce probably would be the best opportunity that we could see going forward. After all, this is a market that has been grinding lower for a while, and it was only a matter of time before we had to get some type of relief rally. We may be starting to see that relatively soon, so I think we will be able to take advantage of “cheap US dollars.” As long as Australia continues to lock itself down, it makes sense that we would see the Aussie dollar itself struggle in general.

AUD/USD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.