AUD/USD Price Forecast – Aussie dollar challenging major support

First and foremost, the Australian dollar is highly linked to Asia and commodities. This is because Australia is a major exporter of hard commodities to countries such as China, and therefore currency traders will simply play the Aussie dollar as a proxy on what’s going on in that part of the world. With the recent trade tariffs being slapped around by both the Americans and the Chinese, it has put a bit of a damper on any Aussie enthusiasm that a trader may have. However, we have tested structural support at the 0.7350 level, and did in fact find a bit of a bid there. The question now of course is whether or not that level can hold?

If we break down below that level, it’s likely to be very negative for the Australian dollar and could send it tumbling towards the 0.70 level where the next major support level is. However, at the very least it’s likely that we should get some type of positive bounce. The question then becomes whether or not we can break above the 0.75 handle, which would be thought of as a major victory by the bulls at this point. I believe that the world is getting used to the idea of these tariffs being thrown back and forth, and quite frankly it’s a negotiating tactic at this point. As long as things don’t get too out of hand, I anticipate that there will be value hunters looking to buy the Aussie dollar in this general vicinity. However, if we broke down below the 0.7350 level for any significant amount of time, this pair could unwind rather quickly.

AUD/USD Video 21.06.18