The Australian dollar has rallied significantly during the trading session on Tuesday, breaking above the 0.67 level finally. Having said that, the market still has a lot of resistance above at the 0.6750 level, an area that I think will find fresh selling. However, Chinese factories are starting to open again, at least on a minor scale and that could be the beginning of the end of the selling of Australian assets.
AUD/USD Video 12.02.20
All things being equal though, a break above their opens up the door to the 50 day EMA. The Australian dollar is most certainly oversold, so a little bit of profit-taking at the very least makes quite a bit of sense. It is going to be interesting to see how this plays out, but it certainly looks as if people are trying to pick up a bit of value here, and as a result we are starting to see a little bit of momentum picking up later in the day. That being said though, I do not expect to complete trend change, and I think that it’s only a matter of time before you get another opportunity to sell the Australian dollar at a higher level. Economic numbers simply do not support the Aussie yet, and it is probably a bit premature to start buying it based upon anything involving the coronavirus. It is worth mentioning however that the area below the 0.67 level does begin the overall consolidation range from the financial crisis so many years ago. Yes, we are that low in value.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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