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AUD/USD Price Forecast – Australian dollar continues to rally

Christopher Lewis

The Australian dollar has had a good run early on Friday, breaking towards the 0.6850 level. This is also the scene of the 50 day EMA, but perhaps more importantly it is the scene of previous support, so it should now be resistance. Any signs of exhaustion in this area could be a nice opportunity to start shorting again. Ultimately, the market could go down to the 0.68 level, perhaps even the 0.67 level. Remember, the Australian dollar is highly levered to the US/China trade talks, which at least in the short term and look to be getting a firmer footing.

AUD/USD Video 09.09.19

Longer-term though, the structural problems between the Americans and the Chinese continue and should be a major problem going forward. All things being equal, this is a market that should be sold at signs of exhaustion, and I think it’s difficult to be a buyer at this point. My suspicion is that what we are looking at is a bit of short covering, as the market may have gotten a bit oversold. With all that being said, it’s likely that we will eventually go lower but I believe at this point in time it’s probably easier to simply let the market rise and then start to roll over yet again.

Looking at Australia itself, the housing market is starting to cause major issues and of course the RBA looks to be very soft longer-term and likely to cut rates going forward. If there is more concern around the world, the Aussie will get hammered as money flows into the US Treasuries market.

This article was originally posted on FX Empire

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