The Australian dollar has fallen rather hard during the trading session in reaction to the three separate Asian central banks cutting rates. This shows that there are a lot of concerns, especially when it comes to global growth. Asia is very sensitive to this, which has a negative effect on the Australian dollar as the Australians are major suppliers of commodities to countries such as China. As long as the trade war continues, it’s difficult to imagine a scenario where the Australian dollar shows a lot of strength.
AUD/USD Video 08.08.19
Looking at this chart, it’s likely that we continue to show signs of exhaustion on short-term rallies, and I do think that the 0.68 level which was massive support previously should now be technical resistance. This is a market that has been oversold for some time, but quite frankly it can’t seem to get out of its own way. If that’s going to be the case, then I fully anticipate that we go looking towards the 0.65 handle underneath which is a large, round, psychologically significant figure and of course one that will attract a lot of attention. It is structurally sound for several different reasons and therefore I think a lot of people will be attracted to that level. However, if we were to break above the 0.68 handle, then I think the 50 pip increments that I have marked on the chart are all areas you start to look for selling pressure to take advantage of.
This article was originally posted on FX Empire
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