The Australian dollar has rallied a bit during the week, but as you can see did not closed towards the top of the candle. This tells me that the market is likely to continue to struggle in this general vicinity, but it is worth noting that the 0.67 level is the beginning of a major consolidation area down to the 0.63 handle. That consolidation area coincides with the financial crisis previously, and that suggests that we are going to continue to see a lot of action in this area.
AUD/USD Video 17.02.20
Longer-term, I do believe that the Australian dollar will be bought and picked up from this area. I believe that we are in the process of bottoming, but it’s going to be a very messy affair. Ultimately, the market looks likely to try to bounce from here, but we need good news out of China. In fact, the likelihood of a bounce is rather high, due to China recovering from the coronavirus. As soon as that happens, we should see an explosion in growth. The demand coming out of China will be astronomical for Australian commodities such as iron, copper, and many others.
If we do break down from here, I am going to wait for some type of support of candle to take advantage of. If we can break above the shooting star shaped candlestick from the previous week, then it’s time to start buying in my estimation but it is going to be a very noisy and rocky road to the upside. In fact, we could be in the early stages of a potential trend change, but I’m not quite ready to put money to work yet.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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