AUD/USD Price Forecast – Australian dollar continues to fight

The Australian dollar has initially fallen during the trading session on Thursday, but then turned around to show signs of fight again. With that being the case, it looks like we continued the choppy and sloppy drive lower.
Christopher Lewis
AUD/USD daily chart, August 30, 2019

The Australian dollar has initially fallen during the trading session on Thursday but has recovered a bit to reenter the consolidation that we had been in before. However, I would point out that the highs are starting to tilt lower, and it suggests that we are going to continue to see a bit of a grind lower. This makes perfect sense as the US/China trade tensions continue unabated, and at this point it’s likely that nothing is going to change. In fact, Australia has a whole list of problems just waiting to cause issues. The housing crisis and Australia is starting to come to ahead, as debt becomes a major issue.

AUD/USD Video 30.08.19

Beyond all of that, the US dollar continues to attract a lot of attention to the fact that people are buying US Treasuries. Although the Federal Reserve is likely to cut interest rates, the reality is that people are running away from anything related to China and/or Asia. This is going to be as destructive to the Australian economy as the Chinese boom had been positive. Simply put, this could end up being a bit of a rebalancing as supply chains are being diverted.

To the downside I see the Australian dollar running towards the 0.65 level, but it’s probably going to be more of a grind at this point than anything else. I think anything between here and the 0.68 level that show signs of weakness should be a nice selling opportunity. That’s how I have been playing this market for a good month or so now, and it’s worked out quite nicely.

Please let us know what you think in the comments below

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