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Christopher Lewis
AUD/USD daily chart, February 22, 2019

The Australian dollar initially tried to rally during the trading session on Thursday, but then rolled over at the 0.72 handle. By doing so, it looks very likely that we are going to continue to see struggles going forward, as the market has seen this area be the beginning of resistance for a while. I think that at this point it’s very likely that we will go looking towards the 200 day EMA though, which means that we will probably go towards the 0.7250 level.

AUD/USD Video 22.02.19

I do believe that eventually we break above that level, but it’s going to take some time to make that happen. Ultimately, I think that a break above that level will probably have something to do with good news coming out of the US/China trade talks, which should then send this market looking towards the 0.75 handle. Overall, this is a market that is in the process of bottoming longer-term, and I think we will start to see a significant flow of money going into this market, as it simply continues to build this massive base. These trend changes take forever at times, and that might be what we are looking at.

The main reason I see this as a potential trend change is that we have significant support on the monthly chart down to the 0.68 handle, so given enough time I do think that it holds. Historically it always seems to move the market, and the Australian dollar is massively cheap considering longer-term time frames. Beyond that, the Federal Reserve looks very likely to continue to soften its stance.

Please let us know what you think in the comments below

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