AUD/USD Price Forecast – Australian Dollar Continues Choppy Behavior
The Australian dollar has initially tried to rally during the trading session on Tuesday, reaching towards the ever present 0.70 level. That is the beginning of significant resistance extending all the way to the 0.71 handle, so it is worth paying close attention to. Furthermore, the retail sales numbers were double what they anticipated seen coming out of the United States, so that is a very good chance that money will start to flow back towards United States as the Australian economy is struggling a bit in the sense that we are going to see the first deficit in decades.
AUD/USD Video 17.06.20
The real question is what is going on in China? After all if the Chinese economy struggles, that is a very negative sign for Australia. There are parts of Beijing being shut down already again, and that could cause people to be a bit cautious about putting money into Australia. With that in mind, and the fact that we are overbought, I like the idea of fading the Aussie dollar, but I am not looking for some type of massive breakdown.
I think the 0.6675 level underneath will be crucial, not only due to the fact that it was previous resistance but also the fact that it is right where the 200 day EMA is currently sitting. With this, I think at the very least we need to pullback, but I do not necessarily think it is going to be rapid. On the other hand, if we were to break above the 0.71 level, then the market could break out for a bigger move.
For a look at all of today’s economic events, check out our economic calendar.