AUDUSD - the trend continues

This currency pair has been on the downtrend since the start of the year with the Aussie losing 10% year to date. The major reason for this was due to sensitivity of the AUD to the trade tensions between the US and China and the slowdown of the latter.

China is the largest export partner to Australia – in 2016, Australia exported $195 billion of goods, of which one third was sent to China.

As we can see from the below chart, the pair formed a channel and my idea is that this will continue until it reaches the support (green line) at 0.68.

In the meantime, one can also profit by trading inside the channel. As things stands, one can go long until it reaches the resistance of the channel at 0.718.

Over the long term however, I expect that the exchange will continue to go down.

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