AUD/USD daily chart, May 03, 2019

AUD/USD Price Forecast – Australian dollar gives up gains

The Australian dollar rallied a bit during the trading session on Thursday but gave back quite a bit of the gains to turn around and form a negative looking candle. It does appear that we could break down to the support region underneath the 0.70 level, but with so much significance of this area, and the fact that it is roughly 200 pips wide, I’m not interested in shorting this market. Don’t get me wrong, I do believe that it can break down but it is going to take a lot of work to do so.

AUD/USD Video 03.05.19

Quite frankly, I will be watching the US dollar in general, and using it as a barometer as to how I should be trading this market. If the US dollar continues to strengthen, I will probably short other currencies against that, because the Australian dollar will have a harder time falling. However, if the US dollar starts to weaken, this might be a good place to place a new trade. In general, I think we are in a situation where we are trying to form a bit of a bottom, but I recognize that we have a lot of work to do. This can take a long time, so I don’t expect it to happen overnight so to speak. With that, the Australian dollar tends to be more of an investment than anything else. With this in the back of my mind, this is essentially a “one-way trade.” However, we don’t have that scenario set up currently to take advantage of.

Please let us know what you think in the comments below