The Australian dollar fell a bit during the trading session on Friday, but then turned around form a hammer. The hammer of course is a bullish sign and of course there is a lot of support just below. I think that eventually we could bounce from here and go towards the 0.73 level but I think as long as we have a lot of concerns out there when it comes to the US/China trade relations, then I think we are going to see this pair be very choppy at best.
AUD/USD Video 10.12.18
The 0.75 level above is a major barrier to overcome, and if we did do that I think that the market could go much higher. Overall though, I think that we will simply chop around back and forth and be very noisy. As we are in a tight range, I think we can simply plan on going back and forth. However, if we get a lot of negativity when it comes to the US/Chinese trade relations, it could send this market lower. I believe that the 0.70 level causes a lot of support though, so I don’t think we go much lower than that unless of course things accelerate to the negative side overall.
I think between now and the end of the year, we will be between 0.72 and 0.75, as we simply have no directionality or confidence in the outcome of that situation. Remember, the Australian dollar continues to be highly levered to the Chinese economy.