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Christopher Lewis
AUD/USD daily chart, October 24, 2019

The Australian dollar has gone back and forth during the trading session on Wednesday; however, we are closer to the top than the bottom based upon historical trading. The 50% Fibonacci retracement level continues to be a significant barrier in the form of the 0.69 level, so it is very likely that we will see some type of reaction to this area. On both Monday and Tuesday, the market ended up forming a bit of a shooting star, which is a fairly negative. A breakdown below the bottom of the Wednesday candle could unleash this market to reach down towards the 50-day EMA. That is an area that will more than likely attract a lot of attention, and I do think that there is a lot of noise underneath there. However, that’s not to say that we can’t break down, it’s just that I think at this point we are very likely to see this market simply bounce around and form a 200-point range.

AUD/USD Video 24.10.19

However, if we were to break to a fresh, new high then you can start to make an argument for a “W pattern”, which suggests that we could move 200 points to the upside, reaching towards the 0.71 handle above. At this point in time it’s likely that we will decide, but right now the market seems happy to be complacent and to meander back and forth. All things being equal, we are still in a downtrend and that is something that you should pay attention to.

Please let us know what you think in the comments below

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