AUD/USD Forecast May 19, 2017, Technical Analysis

AUD/USD daily chart, May 19, 2017

The Australian dollar had a very volatile session on Thursday, as we initially shot higher, right along with gold. However, we sold off after that as the market then looked for support at the 0.74 handle again. We found it, and then bounced again. Currently, looks as if the markets are a bit disconnected, and are struggling to price the risk of the political turmoil in Washington DC. Longer-term, the market should continue to be bullish overall, but only if the gold markets participate in the rally. The market will continue to be very noisy though, so a smaller than usual position might be a good idea as the Australian dollar continues to whip around.

Buying on dips

As the chart looks now, I suspect that buying on the dips will probably be the best way to trade this market. I think that the 0.74 level underneath should be massively supportive, and a breakdown below there would be a massive negative signal. I think that we will chop around with an upward bias, so keeping that in mind I am taking small positions on short-term charts for short-term gains. Once we break above the 0.75 level, I would be much more comfortable taking a longer-term position. In the meantime, it looks as if this is going to be a bit of a roller coaster ride. When you look at the chart over the last several sessions, you could have made money in either direction. This is a very choppy market and I don’t see that changing anytime soon, and markets will continue to be difficult to navigate. Until we get some type of clarity, I believe that this will continue to be very tough to deal with, and will take a certain amount of wherewithal to handle.

Written by FX Empire