The Australian dollar initially tried to go higher to kick off the trading session on Tuesday but found plenty of sellers above the turn things around again. The Aussie of course is very sensitive to the Asian economies out there, and it certainly looks as if the US/China situation isn’t getting better. Because of this, I think we will continue to see a lot of trouble when it comes to the Aussie dollar, even though its favorite commodity, Gold, is taking off to the upside in general. At this point, I believe that the Australian dollar is trying to find a way to break down even further.
AUD/USD Video 14.08.19
At this point in time, I believe that the market is going to continue to reach down towards the 0.65 handle underneath. That is a major handle from both a psychological and a structural standpoint. If we were to break down below there it could lead to something rather ugly.
In the short term though, it looks as if any rally is to be sold into, as we simply cannot get a bit of a bid that lasts for more than a few hours. Ultimately, the 0.69 level above is massive resistance as well, so it’s going to be difficult to imagine a scenario where the market is rallying for any significant amount of time before we get some type of resolution between the Americans and the Chinese, and even then we have to worry about global growth as the Australian dollar is so sensitive to commodities in general.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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