AUD/USD Price Forecast – Australian Dollar Looking ExhaustedThe Australian dollar has failed to continue rallying again, as the 0.70 level has been extraordinarily resilient as far as resistance is concerned.
The Australian dollar continues to look a bit soft in this general vicinity, as the 0.70 level is a major problem. At this point, it does not look like the Aussie has the ability to plow through that area, so I believe that we will continue to fade short-term rallies as they occur. Ultimately, this is a pair that is based upon risk appetite, and I find it difficult to think that we are suddenly going to have a major “risk on rally.” We continue to get somewhat negative headlines involving the coronavirus, and with earnings season hitting New York, it is likely that we will get more negativity coming out of corporate America. That will drive money into safe haven assets such as the rest dollar.
AUD/USD Video 15.07.20
The one thing that is working in favor of this currency pair is the fact that the Federal Reserve is easing monetary policy, and aggressively so. However, Federal Reserve liquidity is no match for absolute panic, something that we could see with the wrong headlines. Beyond that, the area above 0.70 that extends to the 0.71 handle will be a major resistance barrier that is somewhat trend defining.
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Because of that, if we break above the 0.71 level I would be more of a “buy-and-hold” type of trader when it comes to the Aussie dollar. In fact, my target then becomes 0.80 above. Obviously, that is a longer-term target, but it is a real possibility. At this point though, I think it is more likely that we returned to the 0.68 level, albeit very slowly. That level is supportive so if we were to break down below it, we could open up the door to the 0.6675 handle.
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