As the US and China cool tensions during the trade war negotiations, that should help benefit the Australian dollar. We are seen a series a “higher lows”, and therefore it’s likely that the Australian dollar is going to try to break out above the recent high and continue going much higher. At that point, the Australian dollar will more than likely try to go towards the 100% Fibonacci retracement level which is closer to the 0.71 level. Ultimately, this is a market that I think will continue to find buyers on dips, and therefore the 50 day EMA should continue to offer a lot of support as well. Breaking clear and well above the 61.8% Fibonacci retracement level is a strong sign.
AUD/USD Video 26.12.19
Ultimately, it’s not until we make a “lower low” that I would be concerned about the overall trend. Granted, the trade war headlines could come in and squash any attempt to go higher, but I think that by the end of the year next year, the Australian dollar will be at much higher levels. Buying dips continues to work and has for a couple of months now. This hasn’t exactly been an explosive move higher, and quite frankly that’s a good thing when you are trying to change the overall trend. That being said, I like the Aussie and I will continue to build up a larger core position for next year over the holidays, adding slowly and quietly in order to hang on for the bigger move coming.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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