The Australian dollar initially tried to rally during the trading session on Tuesday but as we entered into a bit of a “risk off” situation, the Australian dollar got sold in favor of owning safety currency such as the US dollar or the Japanese yen. That being the case, it’s very likely that we continue to see a lot of concern out there, especially with the US and China supposedly getting along better, but we have seen this before, and quite frankly it’s a fool’s errand to think that you would see a lot of movement or cooperation coming out of that situation.
AUD/USD Video 11.09.19
The Australian dollar of course is highly sensitive to the US/China trade situation, and at this point it’s very likely that we will continue to see a lot of uncertainty, and as a result it makes sense that we will go reaching towards the 0.68 level in the short term, and then perhaps even down to the lows that we recently had.
The alternate scenario of course is that we break above the 50% retracement level at the 0.6875 handle, which could open up the door to the 0.69 level, followed by the 0.70 level after that. Longer-term though, I think it’s going to be difficult to hang onto gains, especially as the overall situation seems to deteriorate. Global growth concerns don’t help either, so therefore it’s very likely that the US dollar will continue to be favored against the Aussie dollar and other “risk on” currencies.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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