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Christopher Lewis
AUD/USD daily chart, October 23, 2019

The Australian dollar has gone back and forth during the trading session on Tuesday, testing the 50% Fibonacci retracement level again, which was also the recent resistance barrier that the market paid attention to. That being the case, the market looks likely to show signs of rolling over due to the fact that the last couple of days have been relatively quiet. At this point, you should also consider that the market has been in a major downtrend, and therefore it’s likely that the market should continue to favor the downtrend given enough time. Beyond that, the market has also favored the downtrend due to massive amounts of negativity around the world, including the US/China trade situation, which of course the Australian dollar will be very sensitive to as Australia is a major supplier of commodities for the mainland China factories.

AUD/USD Video 23.10.19

Looking at this chart, even if the 50% Fibonacci retracement level gives way, the 61.8% Fibonacci retracement level will be targeted. The 200-day EMA is starting a race towards that area and dipping below the 0.70 level. With that, I do believe that it’s only a matter of time before we sell off, so exhaustion is to be jumped on, just as a breakdown below the bottom of the candlestick for Tuesday would of course send this market lower. All things being equal, this is a market that should continue to be negative, but it will probably be somewhat choppy as well. Remember, the Australian dollar is considered to be a “risk on currency.”

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