The Australian dollar rallied a bit during the trading session on Thursday, reaching towards the 0.68 level early in the day as the Americans stepped on board. The fact that we broke above the hammer from the previous session is a bullish sign but obviously there’s a lot of resistance at this large, round, psychologically significant figure. Beyond that, I would be a bit cautious about buying this pair because there are far too many reasons to think that it will continue to fall apart.
AUD/USD Video 08.08.19
Looking at this chart, I believe that every 50 pips or so you will probably find sellers stepping in to get involved. Because of this, if we do take off to the upside I will simply sit on the sidelines and wait for an opportunity to start selling at signs of exhaustion. Ultimately, this is a market that see a line of trouble above, because with the US/China trade talks not going anywhere this obviously continues to be a major drag on the Australian economy. Furthermore, we have seen a handful of the Asian central banks start cutting rates again, most notably New Zealand which of course is a very similar to Australia. There is a bit of a “sympathetic knock on effect” in this currency to that type of action.
All things being equal, I simply look for selling opportunities that I can take advantage of above. We are a bit oversold so this bounce makes quite a bit of sense.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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