The Australian dollar has initially tried to rally during the trading session on Wednesday but found the 0.7150 level to be a bit too resistive, and then turned around and fell towards the 0.7125 handle. I think that there is plenty of support underneath, especially near the 0.71 level. Longer-term though, we are in the longer-term downtrend, and a bit of a down trending channel. Ultimately, I think that the sellers will return, especially considering that the Sino-American trade relations are so poor.
Overall, the Australian dollar has been sold off rather drastically, and therefore this bounce makes sense. This is a grind that the market is trying to work out, and I think short-term traders will continue to look for small moves higher, but I think eventually we should see the 0.72 level to be far too resistive. Look for an exhaustive candle near that area to start shorting, but in the meantime it looks like we will continue to grind towards there, and I see that not only the 0.72 level is massive resistance, extending to the 0.7225 handle.
Gold has been helpful lately, so that the market should be paid attention to also. If we were to get some type of agreement between the Americans and the Chinese, this could send the Australian dollar much higher as Australia has a huge amount of trade flowing into China in the form of raw materials and commodities such as gold and copper.
AUD/USD Video 18.10.18
This article was originally posted on FX Empire
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