The Australian dollar has rallied a bit during the trading session on Friday, looking very likely to offer more value in the US dollar. It does look like we are ready to continue to go higher, but I don’t think that any move will be of the longer-term as we are certainly in a longer-term downtrend. I believe that the 0.72 level above is going to cause a lot of resistance, as it was previous support. Overall, I believe that the market is finding some value hunting going on, and perhaps a reaction to the US and Chinese leaders meeting at the G 20. However, I think that the market will go back to reality soon, as the trade war is nowhere near being done.
I think being patient and waiting for exhaustion to sell is probably the best way to deal with this market, and that’s exactly how I plan on trading. If we break above the red downtrend line on the chart, then we could be in a situation where we are going to go much higher, but that needs to be seen for me to be comfortable buying. I understand that we could bounce nicely from here, but I’m perfectly comfortable sitting on the sidelines and waiting for a better opportunity. We have seen such a massive selloff that I think the fundamentals of the Australian economy continue to weigh upon the Aussie, not to mention the fact that the Chinese may be demanding less in the way of hard commodities from Australia.