AUD/USD Forecast: Gives Up Early Gain Yet Again
At this point, the market is likely to continue to look at the 50-Day EMA underneath is a significant amount of support, which is also just below the psychologically important 0.69 level.
If the market were to turn around and take out the highs of the last couple of sessions, essentially the 0.70 level, then it opens up the possibility of the 0.72 handle above. 0.72 handle is a large, round, psychologically significant figure that a lot of people will be paying attention to, and therefore it would attract a lot of new traders. In that scenario, it would be a complete evisceration of the US dollar from what I can see. After all, the US dollar has fought back as we sold off rather drastically last week, and now we continue to struggle to break above there.
This could possibly be a significant beginning of selling pressure, but we will have to wait and see how that plays out. Either way does make a certain amount of sense that the Aussie was to struggle, as the overall global picture looks a bit difficult, to say the least.
Ultimately, I think the only thing that you can count on is going to be a certain amount of choppy volatility. The market will continue to be very noisy, and therefore you need to be cautious with your position size, but you also have to keep in mind that sudden moves can and will work not only for you but against you. Once the trade starts to work in your favor, then you can add to a position. You don’t always have to go in with your full size. That being said, it’s a lot of noise just waiting to happen, so I think we have a lot of volatility ahead, and therefore we should eventually get a huge move. It’s also worth noting that the Federal Reserve continues to reiterate its desire to be tight.
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