The Australian dollar pulled back a bit during the trading session on Tuesday but found enough support to turn around and form a bit of a hammer. The hammer of course is a very bullish sign but it sits just below the 200 day EMA so it’s a big problem to deal with. If we can break above the 200 day EMA then we can go looking towards the 0.7250 level. A break above there opens the door to the 0.750 level which I think is major on longer-term charts.
AUD/USD Video 17.04.19
To the downside we have a lot of support this starts at the 0.70 level and extends down to the 0.68 handle. That being said it’s likely that we will try to find plenty of buyers in that area if we were to pull back. In other words, I think that this is a market that you can only go long, and shorting is all but impossible.
The one thing that’s holding the Australian dollar back more than anything else is the US/China trade talks, as it has a massive influence on what happens with the Chinese economy. The Australian dollar is a proxy for the Chinese economy so do not underestimate the correlation between the Aussie and China itself. If we can get good signs of economic activity out of China, and better yet some type of trade deal with the Americans, that should send the Australian dollar much higher. In the meantime we simply grind back and forth with an upward proclivity.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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