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Christopher Lewis
AUD/USD daily chart, August 21, 2019

The Australian dollar has gone back and forth over the last several sessions, and of course the 0.68 level has offered a lot of resistance. We continue to pull back from that area on short-term charts, but I think at this point it’s obvious that the 0.67 level should offer a lot of support. Given enough time, I do think that we roll over and we are starting to go to the bottom of the hammer.

AUD/USD Video 21.08.19

All things being equal, keep in mind that the Australian dollar is highly sensitive to the US/China trade relations. That continues to be a major problem, and of course we have to worry about the global trade situation overall, and of course global growth. The US dollar continues to strengthen overall as traders continue to favor US Treasuries as a place to hide, so it makes quite a bit of sense that this pair continues to drop. Beyond that, the RBA is essentially stuck, as it is held hostage by the US/China trade war, with Australia being a major supplier of raw materials to the Chinese economy.

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I believe that until we get some type of resolution between the Americans and the Chinese, the Australian dollar is a sitting duck. Even if we did break above the 0.68 handle, the 50 day EMA which is pictured in red on the chart should continue to offer resistance as well. To the downside, I suspect that we will eventually reach towards the 0.65 level underneath there, which is a major support level on the longer-term charts.

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