The Australian dollar has found more selling during the week, as we continue to see a lot of trouble. The US/China trade relations continue to deteriorate, and on Friday the Chinese announced retaliatory tariffs against US imports, mainly soybeans and US automobiles. Because of this, there’s no reason to think that the situation is going to get any better, and then of course there’s no reason to think that the Australian dollar is going to pick up value.
AUD/USD Video 26.08.19
Looking at this chart, I suspect that we are going to continue to try to reach towards the bottom of the candle stick from a couple of weeks ago, and then reached down towards the 0.65 level after that. Ultimately, that is my longer-term trade but if we do get a rally then I will simply switch over to the daily chart and look for signs of exhaustion, especially near the 0.68 handle or possibly even the 0.69 level. There is no reason to think that this pair is going to suddenly take off to the upside until we can get some type of resolution between Beijing and Washington. There are no signs of that so I don’t think there’s any argument for buying this pair right now. In fact, I expect things to get a lot worse before they get any better. The Australian dollar is flat on its back and should continue to be sold going forward. With all of that, I’m looking for selling opportunities after rallies.
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This article was originally posted on FX Empire
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