AUD/USD Price Forecast – Australian dollar drift lower

The Australian dollar continued to drift a bit lower during the trading session on Wednesday, as we continue to see a significant amount of negativity out there when it comes to risk assets.
Christopher Lewis
AUD/USD daily chart, May 16, 2019

The Australian dollar drifted a bit lower during trading on Wednesday as we continue to see quite a bit of fear when it comes to global growth and risk assets. Keep in mind that the US/China trade relations will continue to take front stage, and of course the Australian dollar is highly levered to the Chinese economy. Because of this, I believe this market will be very difficult to trade, not to mention the fact that we have a massive amount of support just below. This sets up an interesting scenario.

AUD/USD Video 16.05.19

The Australian dollar has a massive support zone that extends from 0.70 to the 0.68 level underneath. This 200 PIP range is crucial on longer-term charts as well, so I think that the market is going to struggle to break down. It doesn’t mean it can’t, rather that it probably won’t do so suddenly. Momentum simply won’t be on your side when it comes to shorting this pair.

However, if we get some type of good news out of the US/China trade relations this market could shoot straight up in the air as we continue to see the correlation between Australian and China as the Aussies provide so much in the way of raw materials. With that, this is a one-way trade but we don’t have the good news necessary to start buying the Aussie. If we break above the 0.70 level, we will more than likely go looking towards the 0.7050 level, and a break above there could send this market up to the 0.72 handle. If we were to break down below the 0.68 level, that would be an extraordinarily negative sign and could send the Aussie down to the 0.65 handle.

Please let us know what you think in the comments below

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US