AUD/USD Price Forecast – Aussie tumbles with new trade tensionsThe Australian dollar fell again during the trading session early on Friday, as it is believe that the Americans are going to increased tariffs against Chinese imports, which of course is an economy that Australia is highly connected to.
The Australian dollar has been very negative over the last couple of days, as we approach a significant amount of support below at the 0.72 level. That’s an area of the market that I think will attract a lot of buying intention, but at this point if we break down below there you have to start looking for a move towards the 0.70 level after that. This is a market that is highly sensitive to the Chinese situation, and right now it doesn’t look that great. It’ll be interesting to see if the support holds, and if it does it will be an excellent buying opportunity. Because of this, I think this is a nice buying opportunity if we can hold. I think the risk to reward ratio is certainly there, so I’d be willing to take a bit of a chance here, because quite frankly these are the type of trades that can charge your returns.
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If we do break down below the 0.72 level on a daily close, I am more than willing to start shorting at this point, as we would reach towards the larger level. I expect to see a little bit of resistance at the 0.7260 level on a bounce, but if we can clear that then I would anticipate a return to the 0.7350 level, an area that the market seems very comfortable at. Pay attention to gold, it will have its say as well, but I think at this point most of the issue driving this pair is the trade spat between the United States and China.