The Australian dollar initially rallied during the trading session on Tuesday but has found resistance again at the same general region, and the downtrend line that I have drawn on the chart. Whether or not it actually will break out to the upside seems to be an open question, but it certainly does not look good as New York comes online. Ultimately, it comes down to risk appetite in it seems as if the risk appetite is all over the place. I will say this: the Monday session in the stock market was overdone to say the least, and it is likely that we are going to see some of that corrected.
AUD/USD Video 20.05.20
With all of this being said, the 200 day EMA is just above so at this point it does make sense that it is easier to fall than rally from here this has been an extraordinarily resilient rally to say the least, but notice how we are running out of momentum, which is normally the first sign of serious trouble. The market went too far to the downside on its way down to the 0.55 level and has gotten far ahead of itself to the 0.65 level. We will try to find some type of equilibrium before it is all said and done, and all things being equal it could be the 0.60 level. Having said that, it is going to take quite some time to get down there as this market is so heavily influenced by the US/China trade situation.
This article was originally posted on FX Empire
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