Australian Dollar vs US Dollar Technical Analysis

The Australian Dollar initially tried to rally a bit during the early hours on Tuesday but has given back those gains as it looks like we are going to continue to see a bit of negativity. Ultimately, it looks like the 0.6550 level is a massive resistance barrier that’s going to be difficult to overcome, at least in the short term. If we break down below the 0.6450 level, then the market could drop pretty significantly down to the 0.63 level. In general, this is a market that I think will be very noisy, and therefore you need to be cognizant of your position sizing, and of course, your leverage.

The Australian dollar of course is highly sensitive to risk appetite and China. So, pay close attention to that because of course the US dollar will get a little bit of a boost where people are concerned. True, people are starting to suspect that the Federal Reserve is going to start cutting rates and while that could put a little bit of negativity into the US dollar, that’s generally temporary because the reality is when you get to that point, people start to worry about growth, and then they go into the US Treasury market to get a return of their capital instead of a return on their capital, which is a huge driver of what we could see. Because of this, I’m very skeptical of moves to the upside.

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This article was originally posted on FX Empire