The Australian dollar has rallied over the last several days to show signs of strength but seems to be struggling a little bit at the 50 day EMA. This makes sense of course, because it is a market that will quite often be very jittery when it comes to China and all things Chinese. Quite frankly, we have seen quite a bit of back and forth when it comes to headlines, and with the Americans and Chinese meeting right now, it of course is a place where people will be very cautious about putting a lot of money to work in one direction or the other. However, if we get good signs, such as Donald Trump tweeting “Talks with China going very well!”, As we have just seen, that could be a catalyst for more of a “risk on” move which should be good for the Aussie.
AUD/USD Video 09.01.19
Beyond that, the Federal Reserve suddenly looks a bit more dovish, so therefore it makes sense that we will see a little bit of softness in the greenback. However, at the first signs of trouble or disappointment when it comes to the US/Chinese trade relations, we could see this pair turn right back around and head towards the 0.70 level, which has supported extending all the way down to the 0.68 level. I think that is a rather stringent support level though, so it’s going to be very difficult to break down below there. Quite frankly, I think what we are looking at is the market trying to form a bottom, but it needs good news to help.
This article was originally posted on FX Empire
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