AUD/USD Price Forecast – Australian Dollar Falls ApartThe Australian dollar has had a rough trading session on Thursday as we continue to see a major “risk off” type of situation involving the coronavirus.
The Australian dollar has broken down significantly during the trading session on Thursday, crashing towards the 0.67 level. At this point, the market is testing a major support level. At this point, it will be interesting to see whether or not we can recapture this area, and it should be noted that perhaps the Aussie is a bit overextended. However, the Australian dollar has continued to suffer at the hands of the situation in China when it comes to the coronavirus and the potential slowdown in the economy.
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All things being equal, we are overextended so I would anticipate some type of bounce at the first signs of good news. However, it’s difficult to jump into this market now and am the first to admit that I have taken a couple of small hits. That being said, I do believe that eventually we find buyers because we are starting to press the area that was consolidation during the financial crisis 12 years ago. In other words, we are at ridiculously low levels when it comes to the Aussie dollar. Eventually, we will see a turnaround and a longer-term trend change to the upside. When that happens, we are probably looking at a potential three-year move. Furthermore, we could be looking at the market going back to the 0.80 level, but we would need to see some type of good news coming out of China. I anticipate that as soon as the coronavirus abates, this pair will probably shoot straight up in the air.
AUD/USD Video 31.01.20
The best way to look at this is wait for some type of daily candlestick that shows signs of support. At that point, you probably have a significant trade set up for a longer-term position with an excellent risk to reward ratio just waiting to happen. At the mall though, I am getting out of the way.
Please let us know what you think in the comments below