AUD/USD Price Forecast – Australian dollar softens on Wednesday

The Australian dollar initially tried to rally on Wednesday but rolled over again as we continue to see a lot of US dollar strength in general. While this would initially have traders thinking about shorting, the reality is that there is such a massive support level starting at the 0.70 level that extends down to the 0.68 level, that it is very dangerous to try to do that here. The Australian dollar for me at least is a “long only” situation, meaning that I will buy it if the US dollar is starting to rollover, but if the US dollar is strengthening I think it’s just easier to short other currencies against the greenback instead of fighting what is such an obvious barrier.

AUD/USD Video 02.05.19

To the upside, if we can break above the top of the Tuesday candle stick I think we will go looking towards the 0.7150 level above which is the scene of selling. Given enough time, if we can get some resolution to the US/China situation, perhaps then the Australian dollar can finally take off to the upside. Once it does, I believe we will be at the beginning of a longer-term and new uptrend. In the near term though, we will probably have to continue to look at this market through the prism of short-term charts, simply taking what the market is offering, which right now isn’t exactly huge moves. That doesn’t mean it can’t be traded, it just means that it’s a short-term market.

Please let us know what you think in the comments below