AUD/USD Price Forecast – Australian Dollar Bounces From Extreme Lows After RBA Sits Still

The Australian dollar has rallied significantly during the trading session on Tuesday, showing signs of extreme strength as we broke above the top of the previous candlestick, turning it into an inverted hammer. That being said, the market certainly has a lot to choose through as the RBA has failed to cut interest rates, and therefore it’s likely that we will continue to see the Australian dollar rally in the short term. However, there are multiple areas where sellers have stepped in recently, and it would only take a significant headline coming out of China or Australia to send this market right back down. We are at extreme lows, and it should be noted that the low recent trading is the range that makes up the financial crisis trading 12 years ago.

AUD/USD Video 05.02.20

At this point though, it’s very likely that the RBA will be cutting rates later in the year, but at the same time the same thing can be said about the Federal Reserve. Unfortunately for Australia, there is a significant amount of trouble out there just waiting to happen, and therefore this rally is probably going to be difficult to trust. It’s not until I get a weekly candlestick that suggests it should be time to start buying that I would put money to work. Furthermore, a rally at this point should offer an opportunity to start shorting the market at a higher level, giving you a little bit more room to run to the downside.

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