The Australian dollar fell a bit during the trading session on Thursday, reaching towards the 0.71 handle. That’s an area that has offered support previously, as well as resistance. Because of this, I do think that the Australian dollar is trying to bottom out a bit, perhaps trying to reach towards the 0.7250 level above. The 200 day EMA coincides with that level as well, which of course should make it rather resistive. The massive negative candle from the previous session is a difficult thing to overcome, but when we look at the longer-term charts it’s obvious that we are just above major support.
AUD/USD Video 08.02.19
I believe the area below the 0.70 level is the beginning of a 200 pip level of massive support. Because of this, I think it’s only a matter time before we find buyers coming back into this market to push things higher. Ultimately, I think we then go to the 0.75 level after long enough. Overall, I do like the idea of picking up a small position and trading this range overall as there are plenty of reasons to think that the softening Federal Reserve is going to continue to punish the US dollar. Beyond that, if the US/Chinese trade talks can produce something concrete next week, this market will shoot straight through the roof. I still believe that pullbacks are buying opportunities, and ultimately there are plenty of value hunters out there to make this a possibility going forward.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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