By now, you’ve probably heard that the Canadians have arrested a Chinese businesswoman on the request of American authorities. This of course could be a bit of a thorn in the side of the negotiation situation between the Americans and the Chinese, so of course the Australian dollar has suffered as a result. Remember, the Australian dollar is highly sensitive to the Chinese economy, which of course is greatly influenced by the negotiations going on right now between the Americans and the Chinese.
AUD/USD Video 07.12.18
Traders shorted everything related to China and risk appetite when the news hit the wires, and of course the Aussie fell towards the support of the previous downtrend line that had been so resistive. However, I think what will happen next is a bit of consolidation as we go into the jobs figure, which is typical. The jobs figure coming out at 8:30 AM Eastern Standard Time in America will of course have a massive influence on the US dollar, which of course will have a massive influence on this pair. I believe this point, the market is going to continue to move with the headlines involving China overall though, so I anticipate that by the end of the day we will be roughly where we are now, as we have been hovering around the 0.7250 level for some time. Ultimately, this is a market that is going to continue to be very difficult to deal with. I would stay out of it until Monday morning, as there will certainly be headlines over the weekend that can move this market as well.
This article was originally posted on FX Empire
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