AUD/USD Price Forecast – Australian Dollar Continues to Test Highs

AUD/USD Video 05.06.20

The Australian dollar has enjoyed a huge move to the upside, and as a result we are now paying attention to the US/China trade situation which is getting a bit worse. We have not really reached the breaking point yet, but it does seem like tensions are not necessarily going away.

The Australian dollar has seen a surge for quite some time, so a little bit of reality might be just what this pair needs. After all, things cannot go in one direction forever and the higher we go in short order like this, the nastier the pullback will be. That pullback will probably be swift and brutal, and when it happens there will be a lot of pain for everyone. This does not necessarily mean that you can just jump in and start shorting randomly, but it does mean that we have gotten way ahead of ourselves.

All that being said, if the pair breaks above the 0.70 level, it is likely that we will see another wave of buying, and what would probably be thought of as a potential “blow off top.” Quite frankly, a lot of this trade is based upon the hope that the global economy returns to normal, something that seems to be very unlikely anytime soon. However, price is what it is, and therefore we are looking at a market that simply will not rollover. Once it does though, it is going to be very violent.

For a look at all of today’s economic events, check out our economic calendar.