The Australian dollar tried to rally during the day on Tuesday but gave back the gains to form a bit of an inverted hammer by the time the Americans stepped on board. Looking at this chart, the longer-term chart suggests that there is a massive amount of support between the 0.70 level in the 0.68 handle, so even though it looks likely that we are going to break down a bit, the reality is that the area is a bit too “thick” to try and short through. But frankly, fun going to buy the US dollar I’m going to buy it against other currencies as the momentum here just isn’t going to be that great.
AUD/USD Video 15.05.19
On the other hand, if the US dollar breaks down overall, then the Aussie might be a good place to start putting money to work. If we can recapture the 0.70 level, that should drive this pair towards the 0.7050 level, and a break above there really could get things going. That being said, things don’t look very good right now and I do believe that we will probably drift lower. Because of this, it’s very likely that I may not trade the Australian dollar anytime soon. However, there is going to come a time where the United States and China get things together, and when they come to some type of agreement the Australian dollar will probably go parabolic to the upside. Keep that in the back of your mind: if they do come together, this is the first place you want to start buying.
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This article was originally posted on FX Empire
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