AUD/USD Price Forecast – Australian dollar drifts lower for Thursday session
The Australian dollar has broken down a bit during the day on Thursday, and a bit of a “risk off” move. I think at this point though, the selling has started to calm down a bit, and we may get a bit of a bounce. That doesn’t mean that we are ready to break out and I quite expect to see more consolidation overall with the 0.7350 level above offering significant resistance. If that’s the case, I would also expect the 0.7150 level underneath offer support. In other words, this is going to be like many of the Forex pairs right now, a simple range bound choppy play. Because of this, I would anticipate that it’s best to use small positions and aim for small targets.
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On a rally from here, I think this 0.7250 level makes a decent target. If we break down from here, then the 0.7150 level should bring in fresh buying. However, keep in mind that this pair is going to be extraordinarily sensitive to the trade relations between the United States and China, as the Australians are a major supplier of “hard stuff” to the Chinese for manufacturing. At this point, that trade war seems to be getting worse so I think there is going to be a bit of a weight around the neck of the Aussie overall. In other words, I don’t expect to see a break out to the upside anytime soon, although I’m the first to admit that the Aussie has been quite a bit more resilient than I anticipated it would be.