AUD/USD Price Forecast – Aussie recovers quite nicely

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Updated: Aug 25, 2018, 03:22 UTC

The Australian dollar has rallied now that the political situation is starting to clear up in Australia, giving a bit of certainty to a market that had none just a few days ago. It looks as if we are going to continue to recover, and therefore I think it makes sense that we revisit the major level above that had been so interesting previously.

The Australian dollar has broken higher during trading on Friday, showing signs of life going into the weekend. Now that the Prime Minister situation has been settled, it’s very likely that we will see a retracement of the entire “risk off” move that we saw earlier in the week. This has the market looking towards the 0.7350 level, for a return to equilibrium. I recognize that the market of course has a lot of Asian connections as well, but at least at this point we are taking out the wildcard of political uncertainty in Australia. At this point, the currency can start to act as it normally does, a proxy for gold and Asian trade.

The US dollar looks a bit softer during the day on Friday as well, so that’s obviously helping the situation. Ultimately, I think that this market will probably find a lot of resistance at the 0.73 level, but this “reset” gives the market an opportunity to rethink the entire situation without the backdrop of political problems. If we can clear the 0.74 level, then I think we go looking towards 0.75 which is going to be a major area of contention. At that point, I expect a lot of questions to be asked, but it certainly looks bullish in the short term so I’m a buyer overall. I believe that the 0.72 level continues offer the “floor” in the market.

AUD/USD Video 27.08.18

About the Author

Christopher Lewisauthor

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.