The Australian dollar has rallied a bit during the trading session on Friday, as we continue to see a bit of consolidation near the 0.6850 level. Remember, the Australian dollar is highly sensitive to the US/China trade situation, and it should be noted that Australia is one of the largest suppliers of raw commodities to the Chinese mainland. With that being the case, the US/China trade situation and negotiations will continue to move the needle in this market, and overnight we had Chinese officials offering exemptions for purchases of soybeans and pork for domestic companies, in a sign that perhaps the Chinese don’t have the ability to be as hardline as once thought. Because of this, one would have to assume that we are moving closer to the so-called “Phase 1 deal”, that the markets are waiting for.
AUD/USD Video 09.12.19
If we get that, it should help the Australian dollar, and perhaps cause more of a relief rally. It should be noted that the 0.67 level has formed a “double bottom”, which is a very strong supportive sign. That being the case, it’s very likely that the most recent “higher low” has caught the attention of a lot of longer-term traders as well. Don’t be wrong, I’m not ready to call a trend change yet but I am certainly thinking it. The 200 day EMA above will be a major barrier to overcome, and if they can push the Australian dollar above there, this could be the beginning of something rather big. Otherwise, if we break down below the 0.67 level it certainly opens up the door to the 0.65 handle.
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This article was originally posted on FX Empire
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