- The Aussie dollar has broken down pretty significantly during the early hours on Monday as the trade tariffs on both Canada and Mexico, as well as China, even, were announced by the Trump administration in America.
- That being said, we have since seen this market turn around quite significantly, and it looks like the 0.62 level is going to continue to be important.
So, what I'm waiting for is some signs of exhaustion to start selling again, because even if the trade war does not end up being the trade war, the problems that we had with the government and of course, the monetary policy coming out of Australia, as well as the overall economy, are still there. Trump's tariffs really don't change much.
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I can assure you that it's very likely that the tariffs in China won't go away. That of course is going to be a drag in Australia. So, with that being said, I think you've got a situation where you could have a significant rally here, but we also have to keep in mind that we have the non-farm payroll announcement on Friday.
Where Do We Go from Here?
So, we could spend the entire week rallying only to get squashed again due to that. But I think there's a lot of selling pressure above that is more interesting to me than anything else. If we can break above the 0.62 level, and that's a big if at this moment, there's a lot of noise all the way to the 50 day EMA, which is sitting just above the 0.63 level. If we break down below the bottom of the hammer that formed on the Monday session, then the bottom falls out and the Aussie more likely than not goes looking to 0.60.
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