The Australian dollar has continued to grind a bit lower, as the 0.70 level continues to be a massive barrier. That barrier extends all the way to the 0.71 handle, and if we can clear all of that, the Australian dollar will suddenly find itself in more of a longer-term uptrend from what I can tell. At this point though, I think what we are seeing is how difficult it is going to be to break above there, as the market simply does not have the energy to do so. If that is going to be the case, then I suspect it is only a matter of time before we break down.
AUD/USD Video 30.06.20
As this market rallies towards the 0.70 level, I am more than likely to start shorting. Alternately, if we break down below the 0.68 level underneath, then it opens up the possibility of selling as well, reaching down towards the 0.6675 handle. The 50 day EMA has recently just crossed the 200 day EMA which is a bullish sign, but it is often a sign that comes far too late. That being said, I think both of those moving averages could offer a bit of support if we do break down so that is something to pay attention to.
Keep in mind that the Australian dollar is sensitive to the global growth story, and that will have a lot to do with Chinese manufacturing. After all, the Australians supply China with the raw materials for construction and manufacturing, so keep in in mind that the Australian dollar in its own way is a bit of a proxy for China itself. China needs the global growth situation to improve in order to improve its standing, and the “knock on effect” is felt here.
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This article was originally posted on FX Empire
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