British Pound continues to struggleNovember 9, 2018
British pound faces uphill battle against Japanese yenDecember 12, 2018
The Australian dollar, which of course is highly levered to the Chinese economy and the global growth story overall, is a currency that I always pay attention to. On the other side of the equation in this pair, we have the Swiss franc which of course represents a certain amount of safety. As I look at the charts, something has stood out to me over the last couple of days, and now I think we have a very important level to pay attention to.
This is one of my favorite currency pairs to pay attention to when it comes to risk appetite, and if we start to see a roll over in the stock markets, it could have a significant amount of negative pressure in this market. We did have a bit of a pop in the stock markets to kick off the week, but when you look at risk assets, I think this was more of a dead cat bounce than anything else.
We rallied towards the 0.7250 level, an area that has been important more than once on this chart. We fell directly from there almost immediately, so I think if we stay below that level, then we probably go much lower. On the weekly chart, we are dancing around the 38.2% Fibonacci retracement level, and had recently pulled back from the 50% Fibonacci retracement level. Because of this, I do believe that there is certain bearish pressure in this market that will continue to push lower. Beyond that, I think that the market has gotten far ahead of itself in expecting some type of reconciliation between the Americans and the Chinese in Argentina. While I expect the leaders to be polite, I would be rather surprised if something substantial comes out of that argument.