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Christopher Lewis
AUD/USD daily chart, September 05, 2019

The Australian dollar has been very bullish of the last couple of days after initially dipping very low. At this point, the market looks very likely to test the 0.68 level, at that point it’s massive resistance and it extends all the way to the 0.6833 handle. Because of this, I think it’s only a matter of time before the sellers get involved, and with the 50 day EMA racing towards his level makes quite a bit of sense that it would be even more resistive going forward. With this, I believe that we continue to trade based upon the US/China trade situation more than anything else, which of course continues to be a bit of a mess. Ultimately, I think that the market probably rolls right back over, but if we did break above the 50 day EMA we would have to look at the market through fresh eyes.

AUD/USD Video 05.09.19

On the breakout, we would then start to look at every 50 pips as a potential resistance barrier. I do not think that the Australian dollar can continue to rally without some type of agreement between the Americans and the Chinese longer term, and that looks to be very unlikely at this point. Neither country looks ready to negotiate in good faith at this point, so it’s very likely that the Aussie will continue to suffer at the hands of its two largest trading partners. Ultimately, the only thing that keeps it somewhat afloat is gold, but even that has become disconnected.

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