The Australian dollar initially tried to break higher during the trading session on Friday but then sliced through the 0.69 level in a bit of a “risk off” move. Beyond that, we don’t know exactly what’s going to go on between the United States and China, but the one thing that we do know is that it’s probably not going to be good, at least not in the short term. That being said, I think there is plenty of support underneath though, so given enough time it’s likely that the buyers will come back.
AUD/USD Video 17.06.19
To the downside I see the 0.68 level as a major support level based upon longer-term charts. As long as we can stay above the 0.68 level there is a chance that we get some type of recovery. A break down below there is very negative and send this market down to the 0.65 handle. Keep in mind that this pair is highly sensitive to those trade talks and those don’t seem to be going anywhere. On the other side of the equation though is the Federal Reserve and they are on the sidelines and perhaps becoming more dovish. If that’s going to be the case, it provides a little bit of support for this pair, not necessarily because of anything going on between the United States and China or even anything going on with Australia, but simply as the US dollar is probably a bit overbought. Above at the 0.70 level I see a major resistance barrier.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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