The Australian dollar has rallied significantly during Asian trading on Friday as the EU came to a potential agreement when it comes to immigration, one of the biggest problems that the EU faces currently. Overall, I think that this is more of a relief rally than anything else, and I think that it is only a matter of time before the Australian dollar rolls over against the US dollar, as it’s likely that the headlines will eventually produce something that scares a lot of traders yet again. Overall, this is a marketplace that still favor selling, but I would wait for rally to do so.
On signs of exhaustion, that could offer another selling opportunity, as we could go down to the 0.7350 level yet again. Ultimately, this is a market that will be emotionally driven like any other one, but the Australian dollar is highly levered to the Asian economy, so keep in mind that the trade war spat will continue to be a major driver of where this market goes next, so headlines will be a major issue. Overall, I think that the 0.7450 level above will offer a bit of resistance but makes a decent target if we can continue the bullish attitude that we suddenly find ourselves having. Overall, I would not put too much money to work in this market at any one time.