The Australian dollar has rallied again during the trading session on Wednesday, reaching towards the 0.6750 level, an area that should continue to offer a bit of resistance as it has been rather stringent over the last couple of days. Remember, the Australian dollar is highly sensitive to the Chinese economy in all things China related. With that being the case, we will be paying attention to the coronavirus headlines but right now it is still a bit early to get overly excited about it. The number of cases is starting to decelerate, which is the first sign of positivity. However, we are still a long way from normalcy.
AUD/USD Video 13.02.20
At this point, the market is very likely to see a significant break out if we can clear the 0.6775 handle, as it could open up the door to the 50 day EMA. That being said, it could very well happen on the right headlines. However, if we rollover from here it’s probably going to be more consolidation going forward. We are at lows not seen since the financial crisis, so certainly there are going to be significant value hunters out there trying to take a look at the Aussie dollar for a longer-term trade. However, retail traders don’t have the luxury of hanging on to a position for several years most of the time, at least not a position that has any significant size. At this point, I anticipate a bit of consolidation, but I do have my eye on that level above as a potential buying opportunity. If the market breaks to a fresh, new low, the bottom of the financial crisis consolidation is near the 0.63 level.
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This article was originally posted on FX Empire
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