AUD/USD Price Forecast – Australian Dollar Bounces From Extreme Lows

The Australian dollar has bounced a bit during the trading session on Monday to kick off the week, testing the 0.67 level as a sign that perhaps the market had been a bit overdone. At this point though, if the market rallies I still see a lot of resistance at the 0.68 handle. Otherwise, if we turn around a break down to a fresh, new low, then it’s likely that the market could go down to the 0.65 handle next. All things being equal, the market is likely to continue to sell rallies going forward. That being said, a bit of a bounce isn’t a huge surprise but it’s not a trade I am willing to take. The market participants will be looking to cover short positions as well, so keep in mind that not all of this is buying due to wanting to own the Australian dollar.

AUD/USD Video 04.02.20

The next couple of days will be crucial for the Australian dollar, so it is probably better to sit on the sidelines and wait for some type of significant signal. Right now, we do not have that clearly displayed, so it’s important to keep in mind that the Australian dollar is in a downtrend anyway, although it should also be pointed out that the area below the 0.67 level is the beginning of the range we were in during the financial crisis. In other words, this is going to continue to be a very noisy pair going forward. All things being equal, it’s best to fade rallies but we need to see that rally first.

Please let us know what you think in the comments below