The Australian dollar has initially rallied during the trading session on Tuesday, showing signs of extreme bullish pressure before Donald Trump suggested in London that the trade deal could wait until after the election. That had traders a bit spooked, and therefore anything that was related to risk on trading or China was sold off right away. At this point, the Australian dollar still looks as if it is trying to continue going higher, perhaps reaching towards the 200 day EMA. Pullbacks at this point should be a buying opportunity, especially if we see buyers jump in and at the 50 day EMA which is painted in red just below.
AUD/USD Video 04.12.19
It is also a strong sign that buyers are taking every if we can wipe out the top of the range for the day on Tuesday, and then the next fight would be at the 200 day EMA. With that, we could determine the longer-term trend rather decidedly on a significant move above there. That being said, Tuesday was another confirmation of just how sensitive the Australian dollar will be to the US/China situation. At this point, I believe that dips will continue to find buyers, not only at the 50 day EMA but also at the 0.6775 level. If that level were to be broken then it should open the door to the 0.67 handle, as it is a massive support level and a potential “double bottom” on the daily chart. All things being equal, I think that we are trying to form a bit of a trend change, but we have a lot of work to do over the next several weeks, if not months.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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