AUD/USD Price Forecast – Australian dollar continues to consolidate

The Australian dollar has rallied a bit during the trading session on Thursday, showing signs of consolidation just below the crucial 0.68 level which was previous support. At this point I think the market is simply trying to digest the losses and decide whether or not it’s okay to be at this level. Now that we have sat in this area for a while, I think the market will be comfortable with breaking down. After all, we have broken down through a major support level recently, so this of course means that the market has to be comfortable being the slow. Because of this, I think it’s only a matter of time before we break down.

AUD/USD Video 16.08.19

If we do break down, then we are probably going to be looking towards the bottom of the hammer from last week, and then eventually the crucial 0.65 handle, which is massive support on the monthly chart. Because of this, I think the market is going to try to at least test that area, and it makes for a nice target. This doesn’t mean that we get there right away, but it does give me a longer-term target to aim for on small short positions as I continue to build a core position to the downside.

The alternate scenario of course is that we break above the 0.68 level on a daily close, and if we do it’s likely that we could go as high as 0.69 above there as it is the next major resistance area and it also features the 50 day EMA. All things being equal though I favor the downside.

Please let us know what you think in the comments below