AUD/USD Weekly Price Forecast – Australian dollar bounces

The Australian dollar has pulled back during most of the week, especially on Thursday. However, Friday was rather resilient and we bounced enough to form a bit of a hammer like candle. It is at a minor support level in the form of the 0.7050 level, which is just above a massive support level that starts at the 0.70 level, and then extends down to the 0.68 level after that. That is an area that is very prominent on longer-term charts, so this could end up being the longer-term “floor” for the marketplace if we get a trend change the question is what would it take to make the trend change?

AUD/USD Video 28.01.19

At this point, the Federal Reserve does look very likely to try and soften its stance a bit, and that should help gold. Gold should help the Australian dollar. But beyond that, the US/China trade tensions will be a major driver of where the Aussie goes as well. If we can make some type of progress in that scenario, the Australian dollar will be one of the first places that money managers put money to work in order to take advantage of that. At this point, the market participants are going to need to be very patient, but I do think that we are in a bit of an accumulation phase. If that’s the case, the longer-term “smart money” is probably accumulating the Aussie in this general vicinity. If we break down below the hammer from a month ago, that would be extraordinarily negative.