AUD/USD Weekly Price Forecast – Australian Dollar Continues to Consolidate

The Australian dollar fell during the week initially but then found support to turn around and rally to the middle of the range that had formed during the previous week. I think that the Australian dollar is trying to figure out whether or not the global economy is going to suddenly returned to normal. Quite frankly, it is not. The Chinese are coming back to work, but at this point it is difficult to imagine a scenario where the demand is going to help lift the Australian economy.

AUD/USD Video 27.04.20

What most people are not thinking about is the fact that we have seen a fundamental change in the way that business is going to be conducted. The second and third derivative of what just happened can be summed up in a recent survey in the United States were people suggest that they are not willing to go back out and continue living normally. This will drive down the need for a lot of Chinese goods, and furthermore there is going to be a major shift in the supply chain as China will end up being the big loser. While this is a “down the road” type of scenario, it certainly is something that a lot of people out there are going to be focusing on. Furthermore, the 0.65 level above should be massive resistance, so as long as we remain underneath there, I prefer to fade rallies but recognize it has been rather choppy as of late.