The Australian dollar has broken down significantly during the trading session on Monday only to turn around and bouncing early in the New York session. Ultimately, this is a market that has gotten far ahead of itself and I do pay quite a bit of attention to the candlestick from last Thursday which suggests that there could be a bit of trouble above for buyers. Ultimately, I think that the market continues to see the 0.70 level as a massive resistance barrier, so it is worth paying attention to.
AUD/USD Video 16.06.20
To the downside, the 0.6675 level is where we see the 200 day EMA sitting and is a potential target if we continue to see some type of negativity out there. It will be interesting to see how this plays out, because quite frankly this is a market that I think is catching a lot of attention. China is starting to see another wave of infections, so the Australian dollar rallying probably has somewhat of a limited shelf life.
Because of this, I am looking for short-term opportunities to short the Aussie dollar, as I think there will be plenty of negative headlines out there just waiting to cause issues. With that, I believe that we are far too late in the uptrend to start buying so I am looking for signs of exhaustion. However, if we were to break above the 0.71 level, then it could send this market much higher in more of a “buy-and-hold” type of attitude.
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