AUD/USD Price Forecast – Australian dollar shows strength to kick off weekThe Australian dollar has rallied significantly during trading on Monday to kick off the week, as the 0.7150 level has offered support. I think at this point, it looks as if we are going to continue to go back and forth based upon belief of tariffs being levied on China.
The Australian dollar has shown signs of life to start the week, using the 0.7150 level as support. Obviously, that is a good sign but there is plenty of noise above, especially near the 0.72 level. I think that there are far too many other ways to short the US dollar than buying the Australian dollar, which of course is going to be highly correlated to what’s going on between the United States and China, so I think it’s probably better to buy the Euro than the Aussie if you’re going to go against the greenback.
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However, if we get some type of resolution to the US/China situation, that could be massive for this pair. We are at very low levels, but unless the global outlook starts to change, I don’t know that it’s going to be able to lift off. However, I think there is a lot of support underneath, so quite frankly this is a pair that is probably best avoided, but shorted if there’s some type of major shock to the system. If we were to break above the 0.7250 level, then we could get an opportunity to go to the 0.75 handle. Out of my potential plays right now, it’s very unlikely that this will be one that I put much money towards, but it certainly is good to use as a proxy for overall global attitude of all things Asia. Expect choppy and volatile moves.