The Australian dollar has rallied a bit during the day on Monday, showing signs of life again, but quite frankly I think there is a lot of resistance above. This is seen at the gap near the 0.7450 level, where I would expect to see a lot of sellers come in. Longer-term, we have several hammers on the weekly chart, so that of course shows a certain amount of support below, especially near the 0.7350 level. In general, this is a market that I think will continue to move on to risk appetite in trade war fears with Asia and particular focus.
Pay attention to the Gold markets as per usual, as gold has a major influence on the Aussie dollar, as is well known. I believe that there is a certain amount of support near the 0.74 level underneath, and of course if we break down below there we would see a lot of support just above the 0.7350 level based upon weekly charts. I don’t think we’ll break down below there, I think what we are looking at is a lot of consolidation in this general vicinity, as there seems to be a lot of confusion.
The 0.75 level above is resistance, so if we were to rally from here and break above that level, then we become more of a “buy-and-hold” type of situation. I think we are going to see a lot of noise right now, and that’s just the way it’s going to be in the foreseeable future. Employ a back-and-forth range bound strategy.
AUD/USD Video 17.07.18
This article was originally posted on FX Empire