AUD/USD Weekly Price Forecast – Aussie finding support at major level

The Australian dollar has formed a neutral candle stick for the week, finding support at the 0.70 level, an area that of course will attract a lot of attention. Because of this, I believe that the next couple of weeks could be crucial.
Christopher Lewis
AUD/USD weekly chart, December 31, 2018

The Australian dollar has gone back and forth during the week, forming a neutral candle stick at the 0.70 handle, a large, round, psychologically important figure. The fact that we could not break down through it suggests that a bounce could be coming, but I think it’s not going to take much imagination to see this market roll over on signs of exhaustion. Quite frankly, the Australian dollar has to worry about the Chinese economy and perhaps even more importantly the US/Chinese trade relations, which don’t seem to be getting better although there are some moves suggesting that perhaps the Chinese are willing to be a little bit more flexible.

AUD/USD Video 31.12.18

If we do break down below the 0.70 level, the next major support level underneath is at the 0.68 handle. I believe that rallies at this point will struggle at the 0.7250 level, so I be very surprised to see this market break above there. If it did, then we could see the market try to go to the 0.74 handle, but that isn’t something I’m counting on. I believe that the Australian dollar will continue to struggle as long as there are concerns with the trade war, which I think it’s going to be a major theme for the first quarter of 2019. Look for short-term rallies to start selling, or a daily close below the 0.70 level to start selling. I think it’s only a matter of time before we see weakness yet again.

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