The Australian dollar initially fell during the trading session on Thursday but found a bit of support near the 0.69 level, which is the midpoint between the 0.70 level which is the beginning of support, and the bottom which is found at the 0.68 level. At this point, it’s likely that we will find buyers sooner or later but keep in mind that this pair is highly sensitive to the US/China trade relations, so more than likely this pair is going to continue to be very back and forth and difficult to hang onto. However, if and when the Americans and Chinese finally stopped the trade war, this will be THE market to be buying. This is because the Australians of course provide China with so many of its raw materials.
AUD/USD Video 17.05.19
With that in mind, this is essentially a “one-way trade”, as buying the Australian dollar would be easy in the correct environment, but selling it is difficult, at least until we break down below the 0.68 handle. Remember, this is a 200 point range of support that we have seen on longer-term charts, so breaking through this is going to take a lot of effort.
If this market continues to fall, then you simply look to buy the US dollar against other currencies. However, if we get US dollar weakness, especially if it’s related to a “risk on” move due to Chinese trade negotiations, this market’s going to shoot straight up.
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This article was originally posted on FX Empire
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