The Australian dollar initially tried to rally during the week but then drifted lower to reach the 0.6775 handle, and perhaps even a little bit lower. At this point though, the market has a lack of volume as Thanksgiving would have been keeping a lot of bankers in the United States out of the market. The 0.67 level underneath is a massive support level, and at this point it’s very likely that we will continue to see that area hold. If we were to break down below there it would be a catastrophic event for the Australian dollar, perhaps reaching down to the 0.65 handle. If we were to break down below there, then it’s lights out for the Aussie.
AUD/USD Video 02.12.19
On the other hand, if the market was to get some type of good news out of the US/China situation, it’s very likely that the Australian dollar would be the first place where traders will jump two. At this point though, I think we continue to see a lot of noisy action, so it’s a bit difficult to get overly excited about this pair. Wait for some type of impulsive candlestick the lead the way, and therefore give us a heads up as to where the momentum is moving.
At this point, it’s likely that the market is simply waiting for some type of resolution between the Americans and the Chinese, and at this point they may be waiting for some time. However, if we can get that “Phase 1 deal” done, that might be the initial push into the Aussie that momentum traders will be looking for.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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