AUD/USD Rate Outlook Hinges on Details of US-China Trade Deal
It has been the best news to deliver a swing low for the USD, but the development has certainly not affected the view of an impending breakout in AUD/USD rate. Moreover, the Australian dollar has already shown signs of coming out of a tight peg by the US dollar.
From a timely standpoint, and seeing the Final Call makes a slew of conditions, which the AUD/USD breakout may show indications of. If the AUD/USD is to get to the $2.3 level, but there is a hope that it may look like rising by the end of the year. Well, the answer to this question comes down to why are the AUD/USD further losing ground, and why has the AUD/USD been acting, a little bit, uncertain lately.
AUD/USD rate outlook hinges on many factors like, the signing of the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP), along with another deal called the Regional Comprehensive Economic Partnership (RCEP) which provides another major boost to the global economy. Having this as the backdrop, the Euro-dollar spot is still trying to find some kind of equilibrium, where it can face and watch the gyrations that is going on in the FX.
This is a reason why AUD/USD rates might get so jittery, and what the various players are worried about. While it is too early to forecast in a similar way to the USD (i.e. predicting a break) but if you compare the AUD/USD chart to the USD chart, you will realize that the spot is once again doing a back flip.
At the current rate of AUD/USD, it is basically a house position and it is almost that of AUD/Scy as the two currencies are considered to be the biggest money makers in the world. For those who have a great expectation of a strong AUD/USD rate, it is now going to get a pull back in this rate.
The AUD/USD might be going to face another fall in the months ahead and it is especially because the US dollar is significantly weakening against the Australian dollar. The larger opportunity for AUD/USD gain in the coming months or even years is if there is a global slowdown, with the US dollar is taking a beating, that is when the AUD/USD will take a beating.
You see, this is why the AUD/USD has a possibility of being volatile over the next few months. In the current USD/AUD exchange rate scenario, if there is a strong dollar, the AUD/USD might dip below what it was now, the AUD/USD might double, and maybe even triple its price.
The AUD/USD might be especially vulnerable to the turn if there is a big drop in the US dollar, as the AUD/USD is the major contributors of the AUD/USD market. For those who are facing a rapid rise in AUD/USD rates, it is imperative that you look at the positive side of this scenario and not the negative one.
While many analysts would believe that the AUD/USD is going to continue to go up, a more safe way to look at it is, that it is basically a big hedge against a drop in the US dollar, so the AUD/USD must maintain a stable rate, while the USD is still weak. There is a high risk that the AUD/USD will drop, but if it starts to go down, the AUD/USD will rebound.
An AUD/USD rate outlook hinged on details of the US-China trade deal is that the USD/AUD rate is going to hold up, and there will be a bounce in AUD/USD rates, if the USD continues to fall in the months ahead. This is why it is the ideal time to pick up AUD/USD rates and apply short term trades, as it is far too early to predict a drop in the AUD/USD rate.