AUD/USD Price Forecast – Australian dollar pulls backThe Australian dollar pulled back a bit to kick off the day on Tuesday, as we continue to see a lot of weight around the neck of the Australian dollar. This pair is highly sensitive to the Sino-American trade war, and as a result we will need to pay attention to headlines.
The Australian dollar has been a bit of a proxy for the Sino-American trade war, and the Chinese economy in and of itself. I believe that the market participants will continue to look upon the Australian dollar with a bit of suspicion, so at this point it’s very likely that the 0.7050 level underneath offer support, but I think it’s more likely that we go looking towards the 0.70 level for major support. Overall, I do like the idea of picking up the Australian dollar closer to the 0.70 level, unless of course we break down below there. If we do break down below that level, then we could go to the 0.68 level that has been major in its importance.
The 0.71 level above should continue to be resistance, so keep that in mind. I think that given enough time we will start to see the market participants try to find value, but I think it’s a bit early as the US/China situation has not gotten any better. Remember, Australia is one of the largest suppliers of raw materials to the Chinese, and if they are going to be a lot of trade tensions and more importantly tariffs, it makes sense that the Australian dollar will suffer as a result of lack of demand for the local goods. Overall, I suspect that rallies should offer nice selling opportunities, and I will continue to look for exhaustion on short-term charts.