AUD/USD Price Forecast – Australian dollar levitatesThe Australian dollar levitated a bit during the trading session on Monday, as the United States and China decided to slow down trade tariffs over the weekend. This obviously has a massive influence on risk appetite, and obviously the Australian dollar.
The Australian dollar gapped higher to kick off the week on Monday as the US and Chinese negotiators decided to put up a 90 day moratorium on expanded tariffs. It looks as if we may get some attempt at negotiating a settlement, which of course will be good for the Australian dollar as Australia supplies so much of the raw materials for Chinese expansion and construction. I believe at this point, we are very likely to see the Australian dollar rallied towards the 0.75 level if we can remain constructive overall.
AUD/USD Video 04.12.18
However, if the Aussie dollar falls, it will probably be in reaction to the idea that the trade war is going to get worse, or perhaps there are no signs of progress over the next couple of months. I do believe that we will make a run towards the 0.75 level and breaking above that level would be a very bullish sign in general. The alternate scenario of course is that we break down below the 0.72 handle, probably on bad news, sending this market back down to the 0.70 level after that.
Pay attention to gold, it typically has an influence as well, but lately this is been all about the trade war, so I would say that it’s 85% of what you should be paying attention to when you get involved in the Aussie. If we can break above the 0.75 level, I think at that point we will have at least a medium-term trend change. There is a very good chance of that happening, because I believe that the “Santa Claus rally” has just kicked off.