The Australian dollar has shown signs of unease during the trading session on Friday as we await central bankers and their statements coming out of Jackson Hole. With various speeches, there will be people parsing words to try to figure out where central banks are going to go from here. That being said, this pair is highly sensitive to the US/China trade situation, which continues to deteriorate as the Chinese added tariffs yet again in retaliation to US tariffs during the session. That being said though, the Australian dollar has held up rather well considering what could have happened.
AUD/USD Video 26.08.19
Because of this, it’s likely that we continue the overall consolidation until somebody blinks in the trade war, or things get worse. If they get worse, the Australian dollar will certainly tank from here, the 0.6675 level, which is substantively the bottom of the hammer from the previous week. If we do rally from here, I believe that the 0.68 level also offer a lot of resistance. Either way, I think it’s very likely that selling is probably going to be the easier route to take, although in the short term we may get a bit of a bounce.
All of that being said, even if we were to break out from here it’s likely that the market would struggle with the 50 day EMA, and then of course the 0.69 level. Ultimately, I think that’s going to continue to be the way to look at this pair, simply looking for a bounce to sell.
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This article was originally posted on FX Empire
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