AUD/USD Forecast – Australian Dollar Drops on Monday

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially gapped lower during the opening of the session on Monday, only to turn around and fill that gap before it start falling again. At this point, the market looks as if it is testing the 200-day EMA underneath, which is right around the 0.6580 level. In general, this is a market that I think offers quite a bit of trading opportunities in a short-term range-bound type of situation, but if we do break down below the 200-day EMA, and the 0.6560 level, that opens up the door to a somewhat significant drop, perhaps down to 0.6450. On the other hand, if we bounce from this same area yet again, then we’re just killing time yet again.

This is a market that has been extraordinarily choppy and quiet, really with nowhere to be. That does make a certain amount of sense because the Australian dollar is driven by gold, which of for all at the moment, and by global growth and Asia, which isn’t necessarily positive at the moment. And then of course, we have questions about the Federal Reserve and whether or not they are actually going to cut at all this year. So this is just a messy pair.

If you’re a short-term trader, perhaps on something like the 15-minute chart, you’ve done really well. But if you are more of a swing trader like me, you basically have looked at this and waited for an opportunity to put money to work. And right now, we’re testing the bottom of this range, but really nothing overly compelling has happened.

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