The Australian dollar initially pulled back a bit during the trading session on Tuesday, and then shot towards the 0.70 level. That is an area that should offer quite a bit of resistance that extends all the way to the 0.71 handle. Because of this, I think it is only a matter of time before the sellers come back in and push this pair back down. After all, even though the Federal Reserve is trying to kill the US dollar we have a lot of issues when it comes to global growth and of course the Chinese infection rate when it comes to the coronavirus.
AUD/USD Video 24.06.20
To the downside, the 0.68 level has been supportive, but if we were to turn around a break down below there it opens up the possibility of going to the 0.6675 handle. At this point, it is likely that we will see the market find plenty of buyers in that area, not only due to the fact that the market has seen previous support and resistance, but also the 200 day EMA sitting there as well.
At this point, the market could open up the door to a much more negative move, but I do not anticipate that happening in the short term. After all, markets are focusing on one thing only: liquidity. As the Federal Reserve pumps the markets full of US dollars, traders are trying to get away from it, but at the same time the Australian dollar is so highly levered to the Chinese situation that is difficult to get overly bullish.
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This article was originally posted on FX Empire
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