Fundamental analysis

The Australian dollar eased the excitement on Friday after optimism over the first-stage trade deal between the United States and China faded away. The risk-aversion sentiment increased over the weekend before the two countries seemed to be increasingly taking steps to avoid further escalation of tariffs. The United States canceled a tax increase on China over the weekend, agreeing to cut taxes on about $ 120 billion of Chinese goods to half as much as 7.5 percent. In return, China promised President Donald Trump from now on to increase purchases of agricultural products by about $ 50 billion each year. The agreement is expected to be signed early next month. Concerns such as forced technology transfer and Chinese intellectual property theft were not discussed and Trump even left open the discussion of phase two after 2020.

This week's Aussie will take note of China's retail and industrial production data. Recently, results from the world's second largest economy tend to outperform expectations.

Similar factors could push AUD higher as the market tends to support China's easing policy. Risk appetite may also improve if positive data helps to ease concerns about the slowing economy.

Technical analysis

The downtrend on the weekly chart has been broken, signaling the end of a developing downtrend. However, after hitting the Flipzone 0.6925 threshold, the pair AUDUSD has retreated back to the trendline, creating a candle similar to Shooting Star on the daily chart. This zone is also the highest peak of AUDUSD price in the last 4 and a half months. In addition, the Demand zone 0.683 - 0.679 is the area promoting the weekly trendline break. It is likely that under the current downward pressure, AUD may fall to Demand on the day before further price action.

REFERENCE STRATEGIES

Buy 0.6845

Stop loss 0.679

Profit taking 0.704

Main trend: UP

Recommendation: This is forex Trading Idea only. For more accurate analysis, you should incorporate other indicators that you have mastered. In particular, always focus on capital management methods to prevent any possible market situation.

Author: Nguyen Chi Thanh