AUD/USD Weekly Price Forecast – Australian Dollar Pulls Back for the Week

The Australian dollar has pulled back a bit from the highs during the week, and then fell to close well below the 0.65 level. At this point, the market looks as if it is ready to pull back into the bottom of the bottom of the overall consolidation range, suggesting that we could go as low as the 0.6250 level underneath. The Australian dollar of course is going to continue to have issues due to the fact that it is highly levered to China, and currently the Australians and the Chinese are trading barbs. Furthermore, it also needs global growth to accelerate in order to give the Australian dollar a bit of a lift as the Aussie economy is so heavily levered to the idea of commodities to build “things.”

AUD/USD Video 18.05.20

To the upside, if we were to break above the 0.66 level, then it is likely that we will test the 0.67 level, and then become a “buy-and-hold” type of market. Unless you believe that we are going to get a “V-shaped recovery” with the global market, it is difficult to imagine that the Australian dollar will suddenly take off again. Furthermore, Australia is in a recession for the first time in 30 years, so that is something to keep in the back of your head as well. With all that in mind, we are struggling right where we had broken down significantly before, so it would make sense that we struggle again.