The Australian dollar has bounced a bit during trading on Thursday after initially trying to fall towards the 0.67 handle. At this point, the market looks likely to trying to break to the upside in more of a “risk on” type of move, especially if the news about the coronavirus and China starts to get a little bit better, which it slowly is trying to do so. Numbers were higher when it comes to infections, but it’s because they have improved the reporting mechanism so at the end of the day nothing has changed as far as the amount of people infected, it’s just that the reporting methods have.
AUD/USD Video 14.02.20
The idea is that the Australian dollar will have a significant amount of value built into it, assuming that the China situation turns around. Keep in mind that the Australian dollar is highly sensitive to supplying China with its raw materials necessary to continue construction, and of course the massive export machine that China has become.
Currently, I see the 0.67 level as a bit of a center for the potential basing of the Aussie dollar, but it’s going to be a very difficult and long-term affair at this point. The market has a significant amount of support underneath down to the 0.63 level, as the range was the trading area that we had seen during the financial crisis, which of course means that the Australian dollar is essentially priced to see Armageddon. In other words, later this year I suspect that the Australian dollar will be one of the best values out there. To the upside, we may make a move towards the 50 day EMA initially if we can clear the 0.6775 handle.
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This article was originally posted on FX Empire
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