AUD/USD Price Forecast – Australian dollar surges higherThe Australian dollar had a very strong session to kick off Tuesday but did run into a bit of noise above. The markets are weighing whether or not the Chinese tariffs will amount to much, and whether the trade war continues to escalate.
The AUD/USD pair has been noisy to say the least but obviously continues to follow the US/China trade sanction situation very closely. I believe that ultimately this market will find some type of stability, but right now there are simply far too many moving pieces for participants to be comfortable hanging onto this currency pair for any significant amount of time. I think that continues to be the case, as there are simply far too many headlines out there to move things around. I think that the trade war has a lot of people spooked, and then of course there is the overall strength of the US dollar when it comes to emerging markets.
I believe that the market will continue to be very difficult to navigate so therefore I think using small positions will probably be a paramount over the next several weeks. There are so many moving pieces right now that it’s almost impossible to feel comfortable in any particular trade if it’s a full-sized position. However, if you find yourself being proven correct on a break out to the upside or a break down below the 0.7150 level, then perhaps you can add to your position. The Chinese are now filing a complaint with the WTO against the United States, and the trade war doesn’t look like it’s going anywhere. It is because of this that I suspect the sellers will be back fairly soon as this is getting worse, not better between the two powerhouse economies.