The Australian dollar tried to rally during the trading session on Wednesday but has found a lot of trouble above at the 50% Fibonacci retracement level. The 0.69 level above is massive resistance, and at this point we have failed to continue going higher. If we break down below the 50 day EMA which is pictured in red on the chart, it’s very likely that this market could go to the 0.68 level underneath. Keep in mind that the Australian dollar is highly susceptible to external pressures as it is a good barometer for risk appetite around the world.
AUD/USD Video 11.09.19
We have seen a bit of reconciliation short-term between the Americans and the Chinese, but the reality is that we are very overdone during the last couple of weeks, as the Australian economy isn’t exactly booming. There is a housing crisis concerned, and of course the markets have been burnt more than once by the idea of the Americans and Chinese coming together. Quite frankly, there is little reason to think that a trade agreement will be reached anytime soon. Quite frankly, I know people have been hurt by trying to jump on the bandwagon that I find it difficult to think that the Australian dollar will suddenly rocket to the upside. Even if we did break above the 0.69 level, I think that the 0.70 level is even more resistance. All things being equal, this is a market that should continue to drop from here.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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