The Australian dollar has rallied a bit during the trading session on Wednesday in early trading, perhaps based upon algorithmic trading reacting to headlines that the Chinese were willing to step in and buy more soybeans. That being said, the reality is that the Americans are not willing to budge on a minor deal, although there is a line of thinking that Donald Trump will try to make something happen between now and the elections. So far, this has been a major miscalculation by most traders around the world, as people tend to forget that he is a businessman first, and a politician second. Quite frankly, he has a job he can go back to once this is all done.
AUD/USD Video 10.10.19
With that being said, it’s very likely that the 0.6750 level will offer a significant amount of resistance, as it has over the last several days. The market is in a major downtrend, and of course the Aussie is highly sensitive to the US/China trade situation. Ultimately, this week will probably see disappointment more than anything else, so one would have to think that it’s going to be easier to fade this market than to buy it. Buying this market is assuming that the Americans and the Chinese are going to come to some type of understanding. So far, there has been nothing to suggest that’s going to be the case, and the fact that we are heading into technical resistance suggests that fading rallies should continue to be the way going forward. This doesn’t mean a major meltdown, just the short term trade.
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