AUD/USD Price Forecast – Australian dollar falls during Tuesday session breaking supportThe Australian dollar broke down below the 0.71 level during the Tuesday session, as more of a “risk off” trade came into play as we continue to get mixed signals from both the European Union and the United Kingdom. At this point, the global markets are being held hostage to tweets.
The Australian dollar has broken below the 0.71 level during trading on Tuesday, in reaction to the European Union warning the United Kingdom not to “cross redlines”, which is odd really when you consider that the United Kingdom can use that the fault fallback position of the WTO for trade agreements. In essence, it comes down to whether or not the Europeans will ever admit that they don’t have any real power over the British, which doesn’t look likely. Because of this, the markets continue to trade on algorithmic bots reading headlines, because almost as assuredly as this happened, by the time the day ends we will more than likely recapture the 0.71 level.
Gold markets also sold off as the US dollar picked up steam, but that shouldn’t be much of a surprise. The correlation also knocked the Australian dollar lower, and at this point I don’t think that much can be made out of this move other than algorithmic traders are at it. I believe at this point the market is more than likely going to go to the 0.70 level, but almost as soon as the EU statement came out, the Irish delegate said that a deal could happen rather quickly. So in other words, it’s a net washout and this is why I think the market will shrug this off. Perhaps that’s what needs to happen, markets need to ignore these people and then they will finally do their job?