Australian dollar continues to struggle with Chinese headlines
The Australian dollar initially pulled back during the trading session on Monday, but then rallied a bit as we continue to see a lot of confusion when it comes to the Phase 1 deal that was essentially agreed to between the Americans and the Chinese. Remember, Australia is unfortunately highly levered to the Chinese situation, and therefore as long as there are a lot of confusing the headlines and movement forward, the Australian dollar will be at its mercy.
That being said, one thing that has happened is that the tariffs are going to be levied going forward, at least and 30. That being said, as long as that’s the case then there is hope for the Aussie dollar but right now you can see that we aren’t quite ready to break out yet. We are currently trading just below the 200 day EMA and perhaps even just as importantly the 61.8% Fibonacci retracement level. Ultimately, if we can break above the 0.6950 level then it’s likely that we are going to see a trend reversal. I do believe this could happen, but it’s going to take a certain amount of effort to make that happen. In the short term, this market will probably continue to grind in this area, but it certainly looks as if it is trying to build up enough momentum to finally make that breakout. A move above the 0.6950 level could be the beginning of something rather big, especially if we get more meaningful headlines coming from both Beijing and Washington. To the downside, as long as we can stay above 0.6825, the market is probably going to continue to show signs of resiliency. A breakdown below the most recent low could open up more selling pressure going forward as it would probably coincide with some type of negative headline.
That being said, one thing that has happened is that the tariffs are going to be levied going forward, at least and 30. That being said, as long as that’s the case then there is hope for the Aussie dollar but right now you can see that we aren’t quite ready to break out yet. We are currently trading just below the 200 day EMA and perhaps even just as importantly the 61.8% Fibonacci retracement level. Ultimately, if we can break above the 0.6950 level then it’s likely that we are going to see a trend reversal. I do believe this could happen, but it’s going to take a certain amount of effort to make that happen. In the short term, this market will probably continue to grind in this area, but it certainly looks as if it is trying to build up enough momentum to finally make that breakout. A move above the 0.6950 level could be the beginning of something rather big, especially if we get more meaningful headlines coming from both Beijing and Washington. To the downside, as long as we can stay above 0.6825, the market is probably going to continue to show signs of resiliency. A breakdown below the most recent low could open up more selling pressure going forward as it would probably coincide with some type of negative headline.