AUD/USD Price Forecast – Aussie forms bearish candle

The Australian dollar initially gapped higher but then turned right back around to form a very negative candle. This is an ugly little, as the 0.70 level seems to have resisted the market. Beyond that, we have had the meeting between the Americans and the Chinese, and perhaps the market isn’t as impressed as people initially thought. If that’s the case then it would make sense that the Aussie could get punished as it is so highly sensitive to China. After all, the only thing that was settled is that they weren’t going to make the situation worse between the Americans and the Chinese, at least not in the short term.

AUD/USD Video 02.07.19

By forming the candle stick that it did, it’s very likely that sellers may come in and try to fade this rally. Even though the Federal Reserve is probably going to cut rates, there’s the possibility that we may see an interest rate cut out of Australia shortly as well. Ultimately, this is a market that is going to continue to be very sensitive to China and all things related. In other words, based upon what we have seen over the last 24 hours it’s likely that the market participants will continue to be very erratic and perhaps difficult to deal with.

The 50 day EMA which is pictured in red should offer a bit of support underneath, and if we break down below there it’s very likely that the market goes much lower. On the other hand, if we can bounce from that moving average and could be a buying opportunity if we clear the 0.70 level after that bounce.

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