AUD/USD Price Forecast – Australian dollar fades after shot higher

The Australian dollar has shot straight up in the air during the trading session on Thursday, especially after the soft CPI figures coming out of the United States. · FX Empire

Christopher Lewis

Updated Thu, Oct 11, 2018, 9:04 PM

The Australian dollar has faded a bit after the initial shot higher during the north American session on Thursday. The less than expected CPI figure had the US dollar selling off rather rapidly, but we are already starting to see the market give back much of the gains. After all, the fundamentals for the Australian economy are very poor, and this is a longer-term issue, not something that would be dictated by one simple data point out of the United States. Because of this, I think there is a nice selling opportunity setting up, but we could bounce as high as 0.72 before we get overwhelmed by selling pressure. Currently as I look at this market, it seems that the 0.7125 level is offering a bit of trouble though.

If we do selloff from here, it’s likely that traders will probably try to reach the lows again at the 0.7050 level, an area that has been supported several times now. Ultimately, as long as there is trouble in the Chinese economy, it makes sense that the Australian dollar will suffer as the Australian supply the Chinese with so much of their raw materials for exporting goods and of course construction in that country. China has been a major driver of global growth for years, and if it is going to suffer it certainly will have a bit of a knock on effect over in the commodity markets, which by extension will hurt the Australians with their massive amounts of copper, iron, gold, and the like. At this point, even with the surge higher we are still simply in consolidation.