AUD/USD Price Forecast – Australian dollar rallies for Wednesday session

The Australian dollar has rallied a bit during the trading session on Wednesday, using the 50 day EMA as support. Beyond that, we have broken above the top of the hammer from the previous session and tested the top of the shooting star from the Monday session. This is an area of extreme contention and quite frankly I have no interest in trading this pair because there are so many different moving pieces right now. Keep in mind that the Aussie dollar is highly sensitive to the Chinese economy, which of course has had less than stellar economic numbers as of late.

AUD/USD Video 31.01.19

At a more fuel to the fire is the fact that the United States and China are now starting conversations on the trade negotiations, which quite frankly I don’t expect too much out of. That being the case, if we do in fact see very little progress, it will continue to be a bit of a weight around the neck of the Aussie. However, if we get some type of progress out of these talks, that should be very bullish for the Australian dollar.

Simultaneously, the Federal Reserve could very well adopt a more dovish stance, and if that’s the case it should continue to work against the value of the US dollar. In that sense, this pair has competing forces at work right now that are both very strong. The 200 day EMA above is hugging the 0.7250 handle, an area that has been massive resistance. To the downside, we have massive support that extends from the 0.68 level extending all the way to the 0.70 level.