- The Aussie dollar has rallied quite nicely during the trading session on Friday as the speech from Jerome Powell has suggested that the Federal Reserve is at least considering cutting rates.
- That is a change of tune as it makes a certain amount of sense that the US dollar leaves the bullish phase and back into one that could be a bit of a problem.
That being said, I still find this a very suspicious pair. And even with this move higher, there is still a ton of resistance above near the 0.6550 level. And I would look at this as a situation where you could see exhaustion, which might be a selling opportunity.
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The previous trend line still has continued so far. Despite the fact this has been such a nice candlestick, we just haven't really changed much other than covering some of the shorts. I think there are some questions about whether or not there are serious concerns about the economy. If there is the Australian dollar will get hammered because it's a commodity currency. So, it'll be interesting to see how the market looks at this after the weekend.
I’d Be Patient Here
I wouldn't jump into it right away. I would look at this as a market that needs to prove itself. The Australian dollar has underperformed everything else against the US dollar for months now, despite the fact that it had rallied. At this point in time, if suddenly people were worried about the global economy and start running to the US dollar via the treasury market, then the Australian dollar is going to get hammered. A little bit of hesitation is definitely what you should be thinking of at this point, waiting for the Aussie to finally prove itself, it still hasn't.
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