AUD/USD Price Forecast – Australian dollar continues to break lower

The Australian dollar has rallied rather significantly during the trading session on Monday, as we continue to see a lot of negativity when it comes to risk appetite in general. After all, we have a lot of geopolitical concerns, and of course the Australian dollar is highly levered to what would be considered a “risk on” move. The Australian dollar is typically a proxy for gold, China, iron, aluminum, copper, and many other hard materials.

AUD/USD Video 06.08.19

As we have a lot of concerns when it comes to the geopolitical uncertainty involving the US/China trade relations, it makes sense that the Australian dollar is suffering because it is so highly levered to the Chinese economy. The fact that we have fallen off of a cliff is a bit surprising though, because we had seen so much in the way of stability considering all things being equal. I think we have reached an inflection point where people understand that the US/China situation is getting worse and not better, and that continues to be a major problem for the Aussie.

If we do turn around and break above the 0.68 level, then you need to look for signs of exhaustion that every 50 pips increments like I have marked on the chart. This will probably continue to be the case until we get some type of resolution between the Americans and the Chinese, which looks like it’s essentially light years away. In fact, there is a very valid school of thought that suggests the Chinese are willing to wait to see whether or not Donald Trump gets reelected before making any deal.

Please let us know what you think in the comments below