The Australian dollar has rallied during the trading session on Friday, as we have more of a “risk on” type of situation. Ultimately, this is a market that will continue to see a lot of volatility, and you should keep an eye on the 0.70 level as it is the beginning of a move of selling all the way to the 0.71 level. Breaking above there could send this market much higher, in more of a “buy-and-hold” type of scenario.
AUD/USD Video 22.06.20
I do expect a move like that to be rather explosive, and if it does happen then it would make quite a bit of sense that it takes time to have that happen. It is a bit difficult to imagine that we are going to see the Australian dollar break out like that considering that there are a lot of concerns when it comes to Chinese economy with the breakout of coronavirus infections again.
However, it is obvious that the one thing that the market seem to be paying attention to more than anything else is the fact that the Federal Reserve is pumping the markets with as much money as it can. The question now is whether or not the Federal Reserve can deny any type of economic gravity? So far, they are winning the battle so it will be interesting to see how long this goes on. Having said all of that, if we were to break down below the lows of this past week, that could send the Australian dollar down to the 0.6675 level. Unfortunately, I think we are going to see a lot more noise than anything else.
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