The Australian dollar has rallied during the trading session on Thursday, breaking above the 200 day EMA, and of course the resistance at the 0.7250 level. There is a lot of noise just above, and I do think that the Australian dollar will eventually find its legs longer-term, but I also recognize that there is a lot of concern out there when it comes to the US/China trade relations which has a major influence on the Australian dollar as Australia is so highly levered to the Chinese economy itself.
AUD/USD Video 01.02.19
Gold markets have recently broken out, and that of course offers bullish pressure in the Australian dollar as well. The Federal Reserve being a lot more dovish recently suggests that we will continue to see US dollar weakness, but the Australian dollar is a bit of a special situation as it is a proxy for China. I think at this point, we have the jobs number which will have a massive influence on where we go next, and I believe that the market ultimately will find buyers but the question is whether or not we get a pullback first. I suspect we will probably get a pullback that offers value below, and I believe that the 0.7150 level should be supportive.
The major resistance above is at the 0.75, which I think he is at initial target for the buyers. I don’t think we will be able to get above there easily though, and that would obviously be a major turn of events for the marketplace, leading to a longer-term investment rather than some type of trade. I still believe that the 0.70 level underneath is a massive floor in the market that extends down to the 0.68 handle.
