The Australian dollar has pulled back a bit during the day on Monday to kick off the week, reaching towards the massive support that we had seen come into play on Thursday. This is of course interesting, because there should be a lot of price action in this general vicinity. If we get that, then we could get a bit of a bounce. However, we could break down and go towards the 0.70 level, which for me is even more supportive. At this point, even though we have seen a lot of negativity lately, the reality is that there is a lot of structural support in this general vicinity.
The Australian dollar breaking below the 0.70 level would of course be very interesting and attract a lot of attention but looking at longer-term charts, I believe that we have a massive amount of support below the 0.70 level that extends down to the 0.68 handle, which shows up on monthly charts which of course will attract a lot of attention in and of itself. Overall, I do believe that we are getting close to the bottom of this pair, and if we can get any type of good news coming out of the US/China trade talks, that will probably be reason enough to expect this market to explode to the upside. Overall, I believe that the value hunters are coming back rather soon, but we may need to build a bit of a base before we get any momentum.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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