The Australian dollar has rallied a bit during the trading session on Thursday, as we have cleared the highs of the last several candlesticks. By doing so, the market looks as if it is ready to go much higher and it is probably only a matter of time before we reach the highs again. By doing so, it would confirm a major trend change, and that the Australian dollar should continue to go much higher. This makes sense, because the Americans and the Chinese have at least cooled off tensions when it comes to the trade war, and with the election coming up in November, it’s very likely that there won’t be an escalation in the trade war between now and then. If that’s going to be the case, it should be welcome home for the Chinese economy which relies heavily upon Australian commodities, hints the connection.
AUD/USD Video 17.01.20
At this point, the market looks very likely to continue reaching towards the 0.70 level but if we were to break out to the upside than the next target will be 0.72, perhaps even 0.75 over the longer term. To the downside, there is a significant amount of support at the 50 day EMA, but even more important support at the 0.68 handle. If we can stay above that level, then we have the possibility of having a longer-term trend change to the upside. Until we do break down below there, I still have a long bias, but recognize that patience will be one of the biggest prerequisites for trading the Australian dollar has trend changes tend to be slow and messy.
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This article was originally posted on FX Empire
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