The Australian dollar has fallen again during the week, but on Friday we had seen a nice bounce. The candle is a little bit misleading because most of the selloff was on Thursday due to a very poor employment figure coming out of Australia, but quite frankly that is but a minor blip on the radar when it comes to what is driving this pair. Ultimately, the market will continue to move on the latest headline is between the United States and China, as Australia’s a major supplier of raw materials for the Chinese economic engine.
AUD/USD Video 18.11.19
The market is overextended, and it does appear that the 0.67 level has offered significant support. Beyond that, when you look at the daily chart there is a bit of a “double bottom” there and it should also be worth noting that we have recently made a “higher high” on the daily timeframe. With that in mind, it is possible that we are trying to turn things around, but it is going to take an extraordinarily strong amount of pressure to make this market go higher. The 100% Fibonacci retracement level is at the 0.71 handle, and if we can break above there the next target would be the 161.8% Fibonacci retracement level, close to the 0.7350 level.
Obviously, the market will need some type of external pressure to go higher, and quite frankly I think it’s only a matter of time before we get that. There are a lot of traders out there betting that the US in China will come to terms, and although I’m not completely convinced, I recognize that the market is doing what the market is doing and fighting that makes no sense.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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