AUD/USD Price Forecast – Aussie continues to struggle

The Australian dollar initially tried to rally during the trading session on Tuesday but gave back quite a bit of the gains. Ultimately, this is a market that has shown a negative attitude over the last couple of weeks, and I think that will continue to be the case as we are not clear as to what’s going on with the US/China trade relations, because quite frankly it seems as if every time something good happens, something negative happens. I’ve heard quite a few rumblings of a new “Cold War”, and it’s starting to look like it could actually be a reality. This will be a different one of course, because the United States was not trading with the Soviet Union.

AUD/USD Video 19.12.18

Because of this, the Australian economy and by extension the currency will remain at the mercy of negotiators in both Beijing and Washington DC. The Australian dollar is a proxy for the Chinese economy, and of course trade going across the Pacific. If that’s the case, then it’s likely that we continue to see a lot of erratic behavior, but it looks as if the 0.7250 level is offering enough resistance to keep the market down a bit in the short term. After the Wednesday session, we will have a little bit more clarity when it comes to the Federal Reserve, so pay attention to the statement. If it’s hawkish, that will send the Australian dollar level lower. However, if it’s more dovish than anticipated, then we could see a bit of a relief rally.