The Australian dollar has rallied quite nicely during the trading session on Wednesday, as we continue to see a lot of volatility in this pair. This makes a lot of sense as the Australian dollar is highly sensitive to the US/China trade situation, and of course it’s likely that we will continue to see a lot of back and forth based upon the latest headline coming out of either Donald Trump or Beijing, and of course with the December 15 trade deadline coming, it makes quite a bit of sense that there will be a lot of noise between now and then. If the Americans and the Chinese can get some type of an agreement going, that could of course boost optimism and therefore send the Australian dollar higher. Quite frankly, even just a delay in the tariffs would probably be all that’s needed.
AUD/USD Video 12.12.19
Ultimately, if the tariffs do in fact get levied upon the Chinese this Sunday, it’s likely that the Australian dollar will suffer as a result. That being said, it’s likely that the pair will continue to be very noisy so therefore I wouldn’t get too excited about any position. Having said that, the 0.6750 level underneath it looks to be supportive, and if we were to break down below there it’s likely that we go testing the double bottom down at the 0.6 handle. To the upside, the 200 day EMA is likely to offer resistance so we can break above there then it’s likely that the market is going to start a bigger move to the upside. All things being equal, this looks as if it is trying to form a bottoming pattern but quite frankly, we need some type of good news to make that happen.
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This article was originally posted on FX Empire
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