The Australian dollar has gapped lower to kick off the week, but then simply chop back and forth to hang about what has served as basic “fair value” recently. The 0.6750 level is an area that the market has been dancing around as of late, so therefore it’s not a huge surprise to find traders battling here yet again. Overall, I suspect that the market will make a decision based upon the trade talks, which quite frankly aren’t looking very likely to produce much this week. This is unfortunate for anybody who is bullish on the Aussie dollar, because remember that it is essentially a proxy for China. As long as there are problems between the Americans and the Chinese, it’s very unlikely that the Aussie can take off to the upside.
AUD/USD Video 08.10.19
Looking at the chart, I can also make an argument for a bit of a short-term “double bottom”, but I think we are more than likely going to see longer-term consolidation more than anything else as the participants continue to jump into the marketplace in trying to figure out whether or not global growth is going to pick up. That is greatly influential on what happens with the Chinese economy as well, and as a result it’s likely that we will continue to see this market jump around based upon headlines coming from Donald Trump and Beijing. All things being equal, range bound trading is most likely the continuum.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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