The Australian dollar has rallied during most of the week but found enough resistance near the 0.6940 level to roll back significantly on Friday. There is also the 50 day EMA just above and quite frankly at this point it makes quite a bit of sense that we are simply going to hang in this area. The Australian dollar is highly sensitive to the US/China trade situation, which although there has been a bit of progress made in that direction, the reality is that nobody is still completely clear as to what’s happening. Because of this, it looks like the Australian dollar will continue to see a lot of volatility and downward pressure, so at this point it is going to be interesting to see what happens next.
AUD/USD Video 16.12.19
If we were to break above the 0.6950 level, then it’s likely that the market will go looking towards the 0.7050 level. It would also signify that we could see a bit of a trend change in the cards, and that should continue to cause buyers to come in and try to push higher. This needs to be in congruence with the trade situation getting better between the Americans and the Chinese as the Australians provide so much in the way of raw materials for the Chinese economic engine and of course the construction industry there as well. At this point, the agreement is seeming to be very unclear, so I suspect that the Aussie will continue to languish in this general vicinity. This lends itself to be more in short term trading circles than longer-term investors.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- Gold Price Forecast – Gold Markets Rally On Friday
- USD/JPY Weekly Price Forecast – Dollar Continues To Test Resistance
- S&P 500 Price Forecast – Stock Markets Confused By Trade Deal
- U.S. Dollar Index Futures (DX) Technical Analysis – Major Retracement Zone at 97.140 to 96.630 Controlling Long-Term Direction
- E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Close Under 8465.25 Forms Potentially Bearish Closing Price Reversal Top
- E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – 28131 Controlling Today’s Price Behavior