On Thursday (November 01), the  AUD/ USD surged sharply and closed higher on the long-term Yangxian line, which is now further extending to 0.7213. The Australian and Chinese economic data were positive. The latest China's 10 China Caixin Manufacturing Purchasing Managers' Index (PMI) was higher than the 50-year-old line, recording 50.1, which was higher than the expected 49.9, which boosted the Australian dollar. In addition, the dollar weakened overall, which greatly boosted the AUD/ USD.

On the technical side, the AUD/ USD extended its gains and remained above all moving averages. At the same time, the 20-period and 100-period averages formed a golden cross near 0.7100, and the technical indicators were in the overbought area, temporarily losing momentum. If the exchange rate retreats below 0.7120, the bullish trend will not hold.

Summary: The stock market and risk sentiment have become the main theme of the recent foreign exchange market. The Australian dollar has become the biggest beneficiary of Trump’s statement that he may reach a “great agreement” with China. However, it is too early to see more Australian dollars in the medium term. It is necessary to wait until 2019 to find an opportunity to do more Australian dollars. The Australian dollar in November and December will still maintain a high probability. The upper resistance is 0.7240 and the lower support is 0.7120.

Risk warning
The above is general information and does not take into account your investment objectives, financial situation and investment needs.

Article from AETOS