AUD/USD Price Forecast – Australian dollar pierces support

The Australian dollar rallied after initially breaking through support during the trading session on Friday, as the 0.7150 level was broken. However, it looks as if we will probably simply continue the grind lower from a longer-term stance, at least until we can get some type of resolution between Washington and Beijing. I would sell rallies that show signs of exhaustion, and even if we recapture the support level, there is certainly a long stent of “lower highs” above. Short-term sellers continue to jump in and press the sell button on this pair, and I don’t think that’s going to change anytime soon.

Looking at the longer-term charts, if we do break down significantly from here, we could unwind to the 0.70 level, and then down to the 0.68 handle. If we did break out to the upside, and I wouldn’t consider that possible until we cleared the 0.7250 level, then the upside is probably going to extend to 0.7350 where it should find fresh selling again. This is a pair that is going to continue to struggle until we get some type of resolution between the Americans and the Chinese, as the Australians supply so much of the Chinese economy with its raw materials. They are an unfortunate casualty of a trade war that they have nothing to do with, but facts are facts, and the Australian dollar is a proxy for the Chinese economy as far as currency traders are concerned.

AUD/USD Video 10.09.18