AUD/USD Price Forecast – Australian dollar range boundThe Australian dollar continues to bounce around below the 0.7150 level, in somewhat range bound trading. The market looks very likely to continue in this area, at least until we get the next headline coming out about the US/China relations.
The Australian dollar remains in a range, with the 0.7150 level above being massive resistance. At this point, it’s very likely that we will struggle to find overall clarity, as there are a lot of moving pieces when it comes to the US/China relations. Market participants will continue to hang on every word that comes out of both Washington and Beijing, as the Australian dollar is highly sensitive to trade relations between the two countries. Ultimately, I think that the Australian dollar still has a lot of issues ahead of it, so even if we do rally from here I think that the 0.7150 level will bring in a lot of selling pressure. The US dollar continues to enjoy strength against emerging markets as well, and that of course will have a lot to do with where we go next. I think that the market will continue to be difficult to trade for anything along the lines of a longer-term trade unless of course you’re going to the downside.
On a break down, I think that the 0.70 level underneath will be massive support. That’s a psychologically important level, and of course a level that has seen more than its fair share of trading action. Because of this, I am more than willing to sell rallies that show signs of exhaustion, but if we did break above the 0.7150 level, I think at that point the market participants would probably start looking at the 0.72 level next. Either way, it’s going to be very choppy.