The Australian dollar has initially pulled back during the week but turned around to rally significantly above the 0.6750 level, an area that has been crucial going back and forth. Ultimately, this is a market that should continue to see a lot of volatility, because quite frankly it is so highly sensitive to the US/China situation. Looking at the chart, it’s obvious that we are trying to form some type of bottoming pattern, and at this point the market is simply waiting to find out how things work out between Trump and the Chinese. All things being equal, this is a market that is an extreme lows, but if we were to turn around based upon bad headlines, slicing through the bottom of the weekly hammer from the previous week, the market could then go down to the 0.65 level.
AUD/USD Video 14.10.19
To the upside, the market will more than likely find resistance at the 0.69 level, and breaking above there will then have the Aussie looking at the vital 0.70 level. That being said, if we were to get a US/China trade deal and move forward with a substantial package, then the Australian dollar would probably be one of the first places that money goes looking to invest in as it is so beaten down at the moment. Quite frankly, this is a major trade just waiting to happen, so if we get that good news this could be the place to be. Otherwise, I would expect a lot of choppiness back and forth as the market is simply range bound overall.
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This article was originally posted on FX Empire
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