The Australian dollar rallies a bit during the trading session on Monday to continue the overall consolidation that we have seen. The market seems to have a significant amount of support at the 0.6950 level, as well as the 50 day EMA which is pictured on the chart. To the upside, the 0.7050 level is resistance. This market continues to be very noisy, which makes quite a bit of sense considering that the Australian dollar is so highly levered to the Chinese economy.
AUD/USD Video 09.07.19
Beyond that, the US/China trade negotiations continue, and that of course will continue to move this market around as well. I think at this point we are trying to break out to the upside and we are forming a larger “W pattern”, perhaps helped by the fact that we are starting to see a cooling of the tensions between the Americans and the Chinese. However, another factor in this market as the Federal Reserve which is going to be cutting rates. If that’s going to be the case, then the US dollar should fall. I believe that the Aussie is going to try to break out to the upside, but it may be a very noisy affair.
If we can clear the 0.7060 level, this market should continue to go much higher. Based upon the “W pattern”, the market should probably go to the 0.7250 level, as it is the measured move and for that matter is an area where we have seen a bit of noise in the past.
Please let us know what you think in the comments below