AUD/USD Midday Technical Analysis October 31

Although it looks like on the hourly chart we may be trying to wind up the momentum to the upside, the reality is that Australia is highly levered to the Chinese economy and of course the Sino-American trade relations. Does look nowhere near being fixed at this point, and I think any rally at this point is simply a relief rally. I look to sell the Australian dollar in the meantime, and I don’t have any interest in trying to fight the idea of the downtrend. I also recognize though that there is a massive amount of support at the 0.70 level underneath, so keep in mind that the level could cause a bit of a bounce. Longer-term, I think we do break down below there and go looking towards the 0.68 level which is even more structurally important on longer-term charts.

AUD/USD Midday Video 31.10.18

Alternately, if we can break above the 0.72 level then I might be convinced to start buying the Aussie dollar. It isn’t that it can’t rally, it most certainly has several times, but the real risk is to the downside without a doubt. I don’t like the idea of trying to get cute with this trade, there’s no point in going countertrend to something that is so obviously bearish on the daily charts. I believe at this point we are likely to see more trouble ahead, so I believe it’s only a matter time before we get a flush lower. If we break below the 0.7075 level, then I think we will start to sell off again.