Australian dollar at confluence of resistance ahead of G 20
The Australian dollar has initially tried to rally during the trading session on Friday but then turned around to show signs of weakness. Beyond that, the market is hanging about the 0.70 level, which of course is a large, round, psychologically significant figure. Because of this, we would expect to see a bit of selling in this general vicinity.
The market will be a waiting to see what the results of the meeting between the Americans and Chinese will be over the weekend in Osaka, and as the Australian dollar is so highly levered to the Chinese economy. Remember, Australia provides China with a lot of the hard commodities for the Chinese manufacturing and construction sectors. This is why the Aussie is quite often thought of as a proxy for China.
I would also point out that the most recent low is lower than the one before. We have yet to make a higher high, but a move above the 0.7060 level would be extraordinarily bullish. I suspect it won’t be until we get the headlines coming out of Osaka that we get the next move. Simply put, I would fully anticipate a gap opening up on Monday. If it’s lower, then we have a target in the most recent lows. If it gap higher, then we could be looking at a trend change and it becomes more of a “buy-and-hold” situation, perhaps reaching as high as 0.7250 over the next several weeks. That being said, it’s difficult to put a lot of money to work before the Monday open but the Monday open will most certainly be an explosive one, giving us an opportunity to form either a new trend, or return to the bottom of the consolidation that we have been in for so long.
The market will be a waiting to see what the results of the meeting between the Americans and Chinese will be over the weekend in Osaka, and as the Australian dollar is so highly levered to the Chinese economy. Remember, Australia provides China with a lot of the hard commodities for the Chinese manufacturing and construction sectors. This is why the Aussie is quite often thought of as a proxy for China.
I would also point out that the most recent low is lower than the one before. We have yet to make a higher high, but a move above the 0.7060 level would be extraordinarily bullish. I suspect it won’t be until we get the headlines coming out of Osaka that we get the next move. Simply put, I would fully anticipate a gap opening up on Monday. If it’s lower, then we have a target in the most recent lows. If it gap higher, then we could be looking at a trend change and it becomes more of a “buy-and-hold” situation, perhaps reaching as high as 0.7250 over the next several weeks. That being said, it’s difficult to put a lot of money to work before the Monday open but the Monday open will most certainly be an explosive one, giving us an opportunity to form either a new trend, or return to the bottom of the consolidation that we have been in for so long.