AUD/USD Price Forecast – Australian dollar running into resistance

The Australian dollar has gone back and forth during the trading session on Tuesday, as we continue to see a lot of noise near the 0.70 level. The fact that we have given back quite a bit of the gains tells me that the market isn’t quite ready to go higher.
Christopher Lewis
AUD/USD daily chart, June 05, 2019

The Australian dollar continues to go back and forth, as the 0.70 level is of course a large, round, psychologically significant figure, an area that has been important more than once. Looking to the left, you can see that there is a lot of choppiness in that area, which means that there is a lot of order flow. I believe that nothing has changed at this point as far as the Australian dollar is concerned, and of course we are starting to go towards the 50 day EMA, which is pictured in red on the chart.

AUD/USD Video 05.06.19

This doesn’t mean that I’m expecting some type of meltdown, just simply that we had gotten a bit ahead of ourselves. In general, I believe that the market stays within the consolidation area that I have marked on the chart that extends all the way down to the 0.68 handle. If we were to break down below there it probably would have something to do with the US/China trade relations falling apart, and therefore would be a general “risk off” move around financial markets.

To the upside, if we were to break above the 0.7050 level, then we could go towards the 0.72 handle next. That area causes a lot of resistance based upon a longer-term chart, so at this point I suspect that we are simply going to go back and forth, but if we were to go that high it’s very likely that the market will struggle to continue. Quite frankly, I don’t see that happening unless we get some type a US/China trade deal worked out.

Please let us know what you think in the comments below

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