The Australian dollar shows signs of trying to form a bit of a bottom down here, as the 0.70 level of course would attract a lot of attention due to it being a large, round, psychologically significant figure. Overall though, I think that the market continues to be very noisy, and it may in fact continue to grind overall as we try to form this base. This is not the easiest trade to take but if you can keep your position size relatively small, you may find that traders are willing to eventually push higher. A lot of this will come down to the Chinese/US trade relations, which of course are deteriorating, but at this point I think we are simply oversold and that probably is an even bigger factor than anything else. Because of this, I anticipate that the market will probably continue to bounce around in this general vicinity.
However, if we break down below the 0.70 level, it’s very likely that we will find a major push lower, with the 0.68 level underneath being a major support level from longer-term charts. At this point though, I think a bounce really wouldn’t be too much to ask out of the Aussie dollar as we have sold off so relentlessly. I think this is more or less going to be a technical move more than anything else, so quite frankly I would be very cautious about going long.
AUD/USD Video 22.10.18