The Australian dollar continues to go back and forth and erratic and choppy trading which makes quite a bit of sense considering that the US/China trade situation continues to be an aggravation to say the least. Remember, Australia is highly levered to the Chinese economy, so the fact that the market is going back and forth is in a huge surprise. At this point in time, is very likely that headlines will continue to throw this market back and forth, as the Australians supply so much of the raw materials for the Chinese construction and export machine.
AUD/USD Video 25.11.19
Looking at this chart, we are most certainly in a downtrend, but the last several candlesticks have shown a proclivity to try to grind higher. Beyond that, the 0.67 level above is massive support, and if we were to break down below there it would open up a new flood of selling, perhaps sending this pair down to the 0.65 level which is the next large, round, psychologically significant figure. However, if we can get that so-called “phase 1” deal signed between the Americans and the Chinese, that might be another reason to send this market a little higher. Currently, I suspect that the 61.8% Fibonacci retracement level above will be the target, closer to the 0.6950 level.
Unfortunately, this is a market that is going to move on headlines more than anything else, and very little to do with the Australian economy. This is going to be a “risk on/risk off” type of proposition, and at this point I think that continues to be the case, simply going back and forth based upon news.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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