The Australian dollar has rallied a bit during the trading session on Friday, as the market has recovered some of the losses that we had received due to the Australian dollar reacting to employment figures on Thursday. Quite frankly, this is a pair that is highly sensitive to the US/China trade talks and that will be the most important thing moving the Australian dollar. While employment does matter to a point, in the current environment traders are probably going to look right through that and pay more attention to Beijing and Washington.
AUD/USD Video 18.11.19
As Australia’s a major contributor of raw materials to China, it makes sense that traders will look at it as a proxy and look for the correlation between the Aussie and China. Beyond that, it is a certain amount of risk appetite that comes into play as well, as the Australian dollar is considered to be a “risky currency.” This is a reflection on Australia itself, rather that it is highly levered to commodity markets. All things being equal, this is a market that is probably trying to change the overall trend, as we have made a series of “higher highs.” That doesn’t mean that it’s easy, but the 0.67 level has offered so much in the way of support in a massive double bottom that it’s going to take quite a bit to break down below that level. All things being equal I think that the market will move on US/China trade hopes, which means you can count on more volatility and choppiness overall.
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This article was originally posted on FX Empire
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