The Australian dollar initially tried to rally above the 0.68 handle, but then rolled over to form a negative trading session. The “inverted hammer” that is starting to form is assigned that we will probably continue to grind lower. However, the big keyword here of course is going to be “grind”, as there is a ton of noise underneath. The Australian dollar of course is very sensitive to the US/China trade relations which haven’t gotten very far at this point in time, although they are supposedly speaking.
AUD/USD Video 23.09.19
Looking at this chart, it’s likely that we will revisit the lows again, which is just below the 0.67 handle, the previous scene of the most recent bounce. The 50% Fibonacci retracement level above had formed several shooting stars due to the resistance and that of course makes quite a bit of sense as the 50% Fibonacci retracement level is widely followed. Beyond that, it’s very likely that the Reserve Bank of Australia is going to be cutting rates soon, so that of course weighs upon the Aussie dollar.
Furthermore, the Federal Reserve just cut interest rates and the reaction was the Australian dollar falling against the US dollar, which is a bit counterintuitive. This suggests that there are a lot of concerns out there, as the greenback would be the currency needed to trade in the US Treasury’s markets, which of course have been doing quite well. I continue to fade rallies but I would not look for major moves, rather short term day trading type of situations.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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