The Australian dollar has rallied during a large portion of the trading session in Asia and Europe on Monday but has given back gains to pump below the 0.67 level in New York trading. Ultimately, the Chinese CPI coming out much better than anticipated helps with the idea of potential growth on the mainland, but ultimately the coronavirus is still front and center, and therefore until it gets contained it’s difficult to get overly bullish about the Aussie. Furthermore, the candlestick from the week previous was very poor looking, so at this point it looks as if follow-through is more likely than not.
AUD/USD Video 11.02.20
Rallies are to be faded, at least until something substantial changes. At this point, is very likely that the market will continue to see a lot of volatility, but I would venture to say more negativity than anything else. Overall, this is a market that looks likely to go looking towards the bottom of the range from the financial crisis, which could have the Australian dollar dropping as low as 0.64 by the time it’s all said and done. Clearly, at this point this is a market that should be sold and not bought. Eventually the market will turn around, but that is a signal that will more than likely show itself on weekly charts if not monthly. The US dollar remains firmly bid against most currencies, and of course the Australian dollar will be any different in this massive “risk off” attitude that the markets have had for some time. Short-term choppy back and forth trading with a negative bias is what I anticipate.
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This article was originally posted on FX Empire
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