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AUD/USD Price Forecast – the Australian dollar rallies into resistance on Tuesday

By:
Christopher Lewis
Updated: Jul 4, 2018, 04:40 UTC

The Australian dollar exploded to the upside during the trading session on Tuesday, as the Chinese central bankers are thought to be watching the Chinese Yuan and its value. Because of this, it’s thought that perhaps Asian stock should rally, and of course Asian economic activity. This has a “knock on effect” to the Aussie dollar.

AUD/USD daily chart, July 04, 2018

The Australian dollar rallied significantly during trading on Tuesday in early hours, slamming into the 0.74 level. This is an area that has been resistance more than once, and although we have exploded to the upside, we have still not technically made a “higher high” on the chart. It is because of this and the plethora of potential headline risk out there that I think the market may continue to be somewhat range bound. If that’s the case, I would fully anticipate this market pulling back significantly. However, if we were to break above the 0.7425 handle, the market could probably go looking towards the 0.75 level after that. Ultimately, the one thing I think you can anticipate is a lot of volatility, as the world worries about trade wars flaring up between the United States and China.

The Australian dollar is a proxy for China in the Forex markets, because the Australian economy provides many of the raw materials for Chinese expansion. At this point, I suspect that we will continue to tread water essentially, as we have so many things to worry about. However, we can break out obviously, and a move above the 0.75 level would send this market looking towards the 0.7750 level over the longer-term. We have recently broken below a major support though, so I suspect it’s good to be very difficult to continue the bullish pressure for the longer-term.

AUD/USD Video 04.07.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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