The Australian dollar went back and forth during the trading session on Friday as we continue to hover around the 0.69 level. This is a market that of course is going to be very sensitive to the US/China trade relations and as those are essentially on hold at currently, and there’s no signs of them getting any better, I would treat rallies at this point with suspicion. However, we are currently in the middle of a major consolidation area that is also a major support zone on longer-term charts. Being in the middle of this means that we are essentially at “fair value” for the short term.
AUD/USD Video 27.05.19
Underneath, I see the 0.68 level as massive support and the 0.70 level as massive resistance. Because this is in the middle of this range, it’s literally a 50-50 chance as to which direction we go next. Those are not odds that I like, because there’s no compelling reason to trade in one direction or the other. With that, I anticipate that this will continue to move back and forth with the US/China headlines, which are almost impossible to trade because you will be behind the curve anytime news comes out, as professional shops have machines that read headlines. At this point, it’s probably better to wait until we break out of this 200 point range and simply follow the market at that point in time. To the downside, it could open up a move to the 0.65 handle, to the upside it could send this market towards the 0.7250 level.
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This article was originally posted on FX Empire
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