The Australian dollar went back and forth during the trading session on Wednesday, as we continue to see a lot of back-and-forth trading, and choppiness to say the least. The Australian dollar of course is highly sensitive to the Chinese situation, which is currently being driven by the US/China trade relations. Australia is one of the most heavily levered to China countries out there, so it makes sense that we will continue to see the fortune of the Aussie be tied to the mainland.
AUD/USD Video 09.05.19
With the Americans and the Chinese meeting over the next couple of days, it should continue to cause a lot of volatility in the Aussie. In general, I believe that the Australian dollar will rally over the longer-term, but we need some type of good news in order to make that happen. The reality of the situation is that the next couple of days could cause wild swings, and I think a lot of traders are simply sitting on the sidelines, which quite frankly is probably the smartest thing to do here.
The best and perhaps the easiest way to trade this market as the pay attention to the US dollar. If the US dollar is strengthening, I would not short the Australian dollar simply because there is a huge 200 PIP barrier of support extending all the way down to the 0.68 level. However, if the US dollar starts to fall in value against most currencies around the world, then it makes sense to buy this pair as we could go to the 0.7150 level.
Please let us know what you think in the comments below