AUD/USD Weekly Price Forecast – Aussie breaks support to form a hammer

The Australian dollar has broken down significantly during the week but turned around of form a bit of a hammer. This is obviously very bullish sign but at this point it’s probably more to do with an oversold condition than anything else.
Christopher Lewis
AUD/USD weekly chart, August 12, 2019

The Australian dollar broke down significantly during the course of the week, slicing through the 0.67 handle at one point. This was in reaction to the three central banks in Asia cutting interest rates, which of course has people thinking the whole neighborhood might be bad. Beyond that, the Australian economy is so highly levered towards the commodity market and of course the growth of China and other Asian countries.

AUD/USD Video 12.08.19

This hammer of course is a very bullish sign, but at this point in time I think we are probably better off selling this pair at the first signs of exhaustion. You may have to look to the daily chart to get your intro signal, but we are obviously in a very negative trend. This oversold condition probably features some type of relief rally that needs to be sold into.

The alternate scenario of course is that we break down below the hammer which of course is extraordinarily negative. The 0.65 handle underneath is a target at this point, and I believe that the 0.69 level above will be an area where sellers may come back in. As long as there are concerns about the US/China trade war, there will also be a lot of problems with the Aussie dollar. At this point, it doesn’t look like we are close to any type of resolution, so is very likely that we will fade rallies and that certainly is what I’m looking to do going forward.

Please let us know what you think in the comments below

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.