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AUD/USD Price Forecast – Australian dollar bounces slightly on Friday

The Australian dollar bounced slightly during the trading session on Friday, as the 0.70 level continues to cause a lot of support. It’s a large, round, psychologically significant figure, and of course it will attract a lot of order flow.
Christopher Lewis
AUD/USD daily chart, December 31, 2018

The Australian dollar has bounced slightly during the day on Friday, as the 0.70 level of course will offer a lot of psychological importance and structural importance. The way that we have bounced from here suggests to me that we are not ready to break down quite yet, and it’s likely that we will struggle to do so between now and New Year’s Day. At this point, the level will probably be a major place of importance for the next leg be it higher, or lower. If we do break down below the 0.70 level, then it’s likely that we go down to the 0.68 handle. Otherwise, if we do rally from here, I suspect that the 0.7250 level could be a major resistance barrier that’s going to be very difficult to take out. Beyond that, we have the 200 day exponential moving average turning lower just above that level.

AUD/USD Video 31.12.18

Because of this I like the idea of breaking down and selling or rallying and selling signs of exhaustion. Ultimately, I don’t have any interest in buying the Australian dollar unless we get some type of new agreement between the Americans and the Chinese when it comes to trade. The Australian economy is highly leveraged to the Chinese economy, so it makes sense that the Aussie would fall right in line with what’s going on there. If we get more negativity, that could be the “straw that broke the camel’s back.” I think at best you’re probably looking at choppy consolidation over the next several days.

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