The Australian dollar pulled back a bit during the trading session on Thursday, as we continue to see a lot of support being tested underneath. Ultimately, the 0.70 level is massive in its implications, so I think that this continues to be an area that value hunters come back and pick the Aussie up. The market seems to react very stringently to the 0.70 level, so at this point I have been using the level as a bit of a backstop.
AUD/USD Video 15.03.19
It’s not until we break down below the 0.68 level that I would be concerned about the Australian dollar, and quite frankly I think that would take some type of catastrophic news. Yes, I’m aware that there is a housing bubble that’s coming undone in Australia, but the reality is that this currency is traded upon Chinese numbers, and not the local economy under most circumstances. With that being the case, pay attention to the US/China trade relations, because if they get better that could be the bottom of the Australian dollar. If we break higher, the 0.7250 level is a major ceiling but once we clear that level we will have completely turned the trend around to the upside.
I have no interest in shorting this market until we close below the 0.68 level on at least a daily candle stick, if not a weekly candle stick. We are a long way away from there, so it’s not much of a thought currently. That being said, I continue to look at this as a market that offers value occasionally on these dips as I can pick up for small and short-term trades.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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