The Australian dollar continues to sloppily go back and forth between the 0.68 level above and the 0.67 level on the bottom. Ultimately, this is a market that is highly sensitive to the US/China trade situation, as Australia provides so much in the way of raw materials to the Chinese manufacturing and construction sectors. With that being the case, the trade negotiations between the Americans and the Chinese continue to push the Australian dollar back and forth. As those negotiations are going nowhere fast, it’s difficult to imagine a scenario where the Australian dollar suddenly picks up steaming goes much higher.
AUD/USD Video 17.10.19
Beyond that, the US dollar of course is crucial when it comes to safety, so the safety of course will be attractive in the form of bonds. All things being equal, it’s likely that the market will continue to bounce around in this general consolidation area that we have been stuck in for what seems like forever. With that, pay close attention to the couple of long wicks that formed at the beginning of the month underneath, because if they get broken it then allows for the market to break down to the 0.65 handle. Alternately, if we do rally from here it’s likely that the 50 day EMA will attract a certain amount of attention. That could be reason enough to sell off, and at this point the market would simply continue to chop around in this area. As we approach the outer ranges of consolidation, then I will be looking for a short-term buying opportunity or selling opportunity, depending which edge we are trading against.
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This article was originally posted on FX Empire
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