The Australian dollar has rallied during early trading on Wednesday, slamming into the 0.68 level. That’s an area that has been significant resistance as of late, and now we have to wonder what the Federal Reserve is going to do next. That could possibly be what determines this next move, as we have been consolidating for some time. Keep in mind that we have seen a lot of negativity as of late, and this makes quite a bit of sense considering that the Australian dollar is highly levered to the US/China trade talks. Ultimately, I think that this market probably continues to find reasons to fall, because unless of course we find some type of major breakthrough in the US/China talks, it’s hard to imagine a scenario that Australian dollar rallies again.
AUD/USD Video 22.08.19
Even if we did break out above the recent resistance, the 0.69 level should be resistance, just as the red 50 day EMA should be resistance as well. In other words, I have no interest in buying this market until the Americans and the Chinese can come to terms, and I suspect it’s probably going to be several months before that happens. To the downside, I think that the market is probably going to go down towards the bottom of the hammer from a couple of weeks ago, and then perhaps even down to the 0.65 level. All things being equal, I remain negative and recognize that although things could get rather noisy, I still favor the downside as the trend has been so ensconced.
This article was originally posted on FX Empire
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