AUD/USD Weekly Price Forecast – political uncertainty causes messy week for the Aussie

After finishing the previous week with a beautiful hammer at support, the AUD/USD pair looked likely to be one that should rally. It in fact did for the initial part of the week, but then ran into a lot of political uncertainty and therefore selling. Now that the uncertainty is out of the way, the market looks likely to continue to focus on the common themes, such as risk appetite and Sino-American trade relations. Remember, Australia is extraordinarily sensitive to Chinese trade, as it is a major supplier to Chinese industry. Because of this, China’s trade with the United States of course has a ripple effect into this currency and the economy.

Gold markets are starting to recover a bit too, so that doesn’t hurt the situation either. I think at this point, if we can recapture the 0.7350 level, the market is likely to reenter the previous consolidation area, meaning that it could go to the 0.7450 level, and even the 0.75. That’s an area that will be even more resistive, but I think at this point what we are trying to do is form some type of bottoming pattern, which can take quite some time on a trend change. Regardless, I believe that the risk now is probably to the upside, and any downside momentum will be somewhat limited by the hammer from the previous week, and of course the stringent support at the 0.72 level underneath.

AUD/USD Video 27.08.18