The Australian dollar has gapped higher to kick off the trading week, pulled back to fill that gap, and then shot to the upside. The market still sees quite a bit of resistance above, so not necessarily looking to buy the Australian dollar, but it is worth noting that the 0.62 level being broken to the upside would in fact suggest more strength and without a doubt more of a move to the upside. That being the case, we would need to see more “risk on” attitude and I think at this point it’s probably a bit much to ask. Ultimately, it would have to involve global demand suddenly picking up, something that doesn’t look very likely to happen.
AUD/USD Video 07.04.20
On the other hand, if the market were to break back below the 0.60 level on a daily close, it’s likely that the market could go down towards the 0.58 level after that. A breakdown below that level could very well send this market down to the 0.57 level next. The Australian dollar is very sensitive to the Chinese growth situation, which of course is going to be hampered by a lack of demand coming out of North America and the European Union. Simply put, if the Chinese don’t have customers, it really doesn’t matter whether they are working or not in their factories. That being said, this is a positive candlestick, so it is something to pay attention to. Short-term traders will probably come in and not this thing back down at the first hint of trouble.
This article was originally posted on FX Empire
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