The Australian dollar had a strong start to the trading session on Wednesday but gave back quite a bit of the gains once we get above the 0.60 level. Ultimately, this is a pair that is highly sensitive to risk appetite and that of course is a major issue to work through. With that being the case, I a bit suspicious about rallies in the Australian dollar, but I also recognize that machines are going to throw this market all over the place.
AUD/USD Video 26.03.20
I do believe that eventually this pair probably continues to see a lot of volatility, but clearly the Australian dollar is something that is to be shorted and not bought. Even if we do break to the upside, I believe that the 0.6250 level is going to be massive resistance as well. In fact, I anticipate that we need to retest the lows again, before something changes. All things being equal, I would anticipate that the Australian dollar will remain on its back foot overall, at least as long as the global economy is somewhat shut down. Furthermore, there is a huge shortage of US dollars, and people will have to come to grips with that. Overall, I like the idea of shorting this pair whenever I get a chance of a breakdown below the bottom of the daily candlestick could be that signal. Whether or not we can break through the 0.55 level underneath might be a completely different question, but if we do then we will almost certainly target the 0.50 level.
This article was originally posted on FX Empire
More From FXEMPIRE:
- EUR/USD Price Forecast – Euro Continues To Test Same Area
- Oil Continues To Suffer As Short-Term Demand Outlook Gets Worse Day By Day
- A Government Too Rash Could Leave the Global Economy in the Wilderness
- Silver Price Forecast – Silver markets Spike but Find Sellers
- U.S. Stocks Lose Momentum As Virus Worries Come Back Into Spotlight
- Gold Price Forecast – Gold Markets Test Highs Again But Fail