The Australian dollar gapped higher at the open of the week, and then went back and forth to form a harami candlestick pattern. This is rather bullish but I also recognize that there is an extreme amount of resistance above. The 0.70 level is major resistance, but if we can get above there this market could really start to take off. I anticipate that this pair will probably go looking towards the 0.72 handle or so on a bullish move from that breakout.
AUD/USD Video 27.05.19
However, to the downside we have massive support at the 0.68 level, and it seems very unlikely that we are going to break through there. If we did, it opens up the door to the 0.65 handle, and this would probably have something to do with a complete capitulation of the US/China trade situation. At this point in time, the market looks very well supported, but it doesn’t necessarily have the catalyst to go higher. If you are willing to hang on for months, we could be trying to carve out some type of bottom here, but I would not be looking for a move anytime soon.
Quite often, when you’re trying to change the trend of the currency pair, the bottoming out process takes what seems like an eternity. You could certainly make an argument for that scenario here. If we get any good news out of the US/China trade relations, this is the first place I would be putting money as the Australian dollar will be a major benefactor.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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