- The Australian dollar has fallen pretty significantly during the trading session on Tuesday, as the 0.65 level is likely to continue to be significant resistance.
- We broke above there during the day on Monday, but gave back quite a bit of the gains, as there was a significant lack of volume on that day, as it was Memorial Day in the United States and it was Spring Bank holiday, I believe in the United Kingdom.
- So, with that being the case, it's not a huge surprise that we are hanging around in the same consolidation region that we had been in previously.
The 0.65 level being the ceiling and the 0.6350 level underneath being significant support. It is worth noting that the 200 day EMA is sitting right in the middle of this noisy mess, I think ultimately, we have to look at this as a market that is waiting for some type of catalyst.
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China’s Influence
The Australian dollar is very sensitive to the Chinese economy, and we need to see how the Chinese economy performs in the global environment. Recently, I had seen shipments from China to the US had dipped, even though there was a ceasefire in the overall tariff war, which could possibly show that there was a lot of pull through as far as Chinese goods to America had concerned.
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So, we'll have to wait and see, but right now it looks like we aren't quite ready to take off to the upside. If we did break above the shooting star from the Monday session, then we could go looking to the 0.67 level.
If we turn around and fall from here, the 50 day EMA sits right around the 0.6375 handle. The 0.6350 level being broken to the downside then opens up a significant drop. That would probably show a lot of strength in the US dollar as well. Expect a lot of volatility and choppiness and watch that shooting star for Monday. could be the key for us going higher.
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