AUD/USD Price Forecast – risk appetite continues to punish the Aussie

The Australian dollar is very soft overall as it looks like we are going to test the 0.70 level finely. The market has been in a downtrend for some time, and I believe that it makes sense that we continue to see more softness as the US/China relations continue to be frosty at best. At this point, there’s very little hope for a change in that dynamic, so it’s almost impossible to think about buying the Australian dollar right now, but I will point this out: if we get some type of resolution to the US/China trade relations, the Australian dollar will be the first place we see buyers.

Looking at this chart, I think if we can break below the 0.70 level, and we almost certainly will, then the market will go looking towards the 0.68 handle. I look at short-term rallies as selling opportunities, as that has worked for months. There’s nothing on this chart that suggests that’s about to change. Ultimately, this is a market that has far too many external factors to change the dynamics, and of course the Australian economy being so highly levered to the situation in China, it’s very difficult to imagine a scenario where we see some type of relief. In fact, I suspect that we will not only test the 0.68 level, but it’s very conceivable that we may break down below that major level as well given enough time. There are no signs of the Americans and the Chinese patching things up anytime soon, so this is one of the easier charts to read.

AUD/USD Video 29.10.18