AUD/USD Price Forecast – Australian dollar continues to struggle

The US dollar has gone back and forth during the last couple of sessions, as we reach towards the vital 0.7250 handle. That’s an area that has been important more than once, and beyond that we have the 200 day EMA just above there. Because of the price action in this area, I suspect that we are getting ready to see some type of pullback, perhaps in repudiation of the overbought conditions that we find ourselves in. After all, we have crashed, only to turn around and bounce even higher. This isn’t to say that the market can continue to go higher over the longer-term, but I think at this point we are simply stretched.

AUD/USD Video 16.01.19

If we can break down below the red 50 day EMA underneath, I think that would be a very negative sign and probably send the Australian dollar down to the 0.70 level. That being said, if we can break above the 200 day EMA, pictured in black on the chart, then we could go higher and perhaps as high as the 0.75 handle given enough time. Keep in mind that this pair is highly sensitive to risk appetite and of course the US/China trade talks, which currently are doing nothing.

Australian economic numbers have been a bit week, and of course Chinese numbers have been as well, both of which are very negative for the Aussie. However, I think right now what we are trading on is the trade war expectations more than anything else.

This article was originally posted on FX Empire

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