The Australian dollar rallied rather significantly during the week, breaking towards the 0.70 level. I think at this point it’s very likely that we will see a lot of resistance in that area, due to the fact that it is a large, round, psychologically significant figure. With the lack of liquidity coming, I think that we will get that pullback but I also believe that the Australian dollar is highly likely to see a lot of volatility during the next couple of months as the US/China trade situation continues to be a main driver of what happens with the Aussie dollar. This is a very strong turn of events, and during the week we even broke above the 50 week EMA. I like the idea of buying short-term pullbacks, taken advantage of the market when it is offering value.
AUD/USD Video 30.12.19
The 0.69 level underneath should offer support, and as long as we can stay above there it’s likely that we could continue to go towards the 0.71 handle. If we can break above the 100% Fibonacci retracement level in that same area, that leads this market to much higher moves, possibly as high as the 0.7350 level. All things being equal, the Australian dollar will move right along with the Chinese economy and the outlook for China itself due to the trade situation, so those headlines will continue to cause a lot of noise. Building up a position slowly is probably the best way to go going forward. I have no interest in shorting this market as things stand right now.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- AUD/USD Weekly Price Forecast – Australian Dollar Breaks Out
- Natural Gas Weekly Price Forecast – Natural Gas Markets Slump
- Natural Gas Price Forecast – Natural Gas Markets Continue To Find Support At Same Level
- Natural Gas Price Prediction – Prices Fall but Rebound Following Inventory Report
- GBP/USD Price Forecast – British Pound Breaks Higher
- GBP/JPY Weekly Price Forecast – British Pound Bounces Against Japanese Yen