AUD/USD Price Forecast – Australian dollar falls on Wednesday session

The Australian dollar initially tried to rally during the day on Wednesday but pulled back significantly to break down below the 0.74 level. However, this wasn’t an overly aggressive move, and as the Americans were away celebrating Independence Day, liquidity would have been an issue anyway. I believe that the market is trying to decide where to go next, but recently we have seen a lot of negativity in this pair, only to turn around earlier this week. I believe that volatility is going to continue to be an issue, as the headlines around the world will continue to go back and forth with the trade war talk. The Australian dollar is highly sensitive to what’s going on in Asia, so keep in mind that the Sino-American relations will be paramount as to what happens with the Aussie going forward. If some type of reconciliation can be reached, then the Aussie should rally. However, it will only take a sudden headline going across the wires to send the Aussie dollar lower again.

From a longer-term standpoint, we have broken below the bottom of the hammer from the previous week, and that of course is a very negative sign. I believe that the volatility will continue to be a major issue, so short-term trading is probably going to be about as good as this market is going to get. I think ultimately, this market could be trying to consolidate between the 0.7350 level in the 0.75 handle, but I still think that there is a major amount of concern out there.

AUD/USD Video 05.07.18