The Australian dollar has rallied slightly during the trading session on Thursday, breaking above the highs from the Wednesday session. That being said, the market is likely to test the 200 day EMA just above, which of course is a longer-term technical signal. That being said, the 61.8% Fibonacci retracement level above is pretty significant resistance near the 0.6950 level as well. At this point, if we can break above there then it’s likely that we could go much higher but that doesn’t necessarily mean that we shoot straight up in the air.
AUD/USD Video 12.12.19
Keep in mind that this pair is highly sensitive to the US/China trade situation, it of course the Chinese economy itself. If the Americans and the Chinese were to sign something, then it’s very likely that the Australian dollar will shoot straight up in the air as the Australians are so highly sensitive to the Chinese mainland and of course provide many of the raw materials for the Chinese economic engine. That being said, we will face a significant amount of resistance just above so I would anticipate another pullback coming.
Looking at the technical analysis, it’s also important to note that there is a bit of a “double bottom” down at the 0.67 handle, so it’s likely that the market has carved out a floor. We also made a couple of “higher lows”, which also is a very bullish sign. Ultimately, a breakout above the 61.8% Fibonacci retracement level has me looking for a longer-term “buy-and-hold” position.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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