AUD/USD Price Forecast – Australian dollar bounces for Tuesday session

The Australian dollar rallied towards the top of the shooting star from the Monday session, which of course is a sign of strength. However, there is a certain amount of resistance above there that should continue to cause issues, so I would not be surprised to see this market roll over a bit from here.
Christopher Lewis
AUD/USD daily chart, December 12, 2018

The Australian dollar has rallied significantly during the trading session on Tuesday, reaching towards the top of the candle stick from the Monday session. At this point, it looks as if the sellers will probably come back in and push this market to the downside. The 0.7250 level is essentially “fair value” for the market, and therefore although we could go there, I think getting above there for any length of time is going to be an issue as we continue to see so much in the way of volatility.

AUD/USD Video 12.12.18

Keep in mind that this pair is highly sensitive to the US/Chinese trade situation, which has seemed to get worse. As long as that’s going to be the case, the Australian dollar will suffer as it is so highly levered to the Chinese economy. At this point, we could very well find ourselves reaching towards the 0.70 level underneath, but I don’t think it’s going to be easy to hang onto a trade for any real length of time regardless. Headlines coming out of Asia or Washington DC can move this pair suddenly, with the irony being that headlines out of Australia will have very little to do with where this currency goes in the meantime. It’s not until we get a resolution to that situation that the Australian dollar can be trusted for larger moves. With that being said, I believe in fading rallies, but I’m not hanging onto large positions.

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