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Christopher Lewis
AUD/USD daily chart, November 06, 2019

The Australian dollar has rallied a bit during the trading session, reaching towards the 61.8% Fibonacci retracement level. By pulling back from that level it suggests that we are quite ready to go higher yet. The 200 day EMA is starting to come closer to trading right now, and that of course will attract a lot of attention. Ultimately, this is a market that continues to see a lot of volatility based upon the US/China trade situation, which of course is a fluid and messy process. Looking at this chart, it does look as if we have been trying to build up a bit of a base but quite frankly at this point there are a lot of headwinds to any type of longer-term “buy-and-hold” type of situation.

AUD/USD Video 06.11.19

If we were to break down below the 0.6875 level, it’s very likely that the market will drop another 25 pips. However, if we were to close on a daily chart above the 200 day EMA, it’s very likely that the market would start to reach towards the 0.71 handle above which is essentially the 100% Fibonacci retracement level. That of course will attract a lot of attention as well. Ultimately, the Australian dollar is very tight and difficult to trade right now, because quite frankly there’s no clear directionality as the RBA statement mentioned that external pressures, and other words the US/China trade situation, continues to be the biggest problem that Australia faces. In other words, it’s out of their hands and at the mercy of what happens in Washington and Beijing.

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