The Australian dollar has rallied significantly during the trading session on Monday, breaking above the 0.6950 level. That in and of itself is relatively positive, but we do have a couple of things to pay attention to just above. The very first of course is going to be the 50 day EMA, as it is tilting lower and is just above current pricing. That being said, it’s very likely that the 0.70 level above is also resistance as it has been a scene of major selling pressure.
AUD/USD Video 25.06.19
Ultimately, signs of exhaustion should be selling opportunities as although the Federal Reserve is more than likely going to cut rates, the reality is that the RBA also could cut rates relatively soon. Beyond that, the US/China trade talks continue, and quite frankly should disappoint as per usual. If that’s going to be the case it should continue to weigh upon the Aussie dollar, so I prefer selling when giving an opportunity. Ultimately, this is a market that I think will continue to be very noisy but I also recognize that we are still well within the consolidation area. The 0.70 level would need to be broken significantly on a daily close, perhaps even a weekly close for me to become very bullish. That being said, in agreement between the Americans and Chinese over the weekend could be the catalyst for that type of move. To the downside, the 0.68 level is massive support, but if it gives way we could probably see another 300 pip drop as it would be a major breach of support at that point in time.
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This article was originally posted on FX Empire
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