The Australian dollar has pierced the 0.60 level underneath, as we continue to see a lot of interest in this area. What’s truly interesting with this area is the fact that it was the bottom of the financial crisis, so therefore it will be interesting to see whether or not market memory will come into play. The market seems to be determining whether or not things are going to get worse, and if they do, we may actually break this level. At this point, the market is likely to see a lot of interest in this area, as it should in theory be an area where a lot of buyers will step in. However, the coronavirus situation changes everything.
AUD/USD Video 18.03.20
If the global market continues to slow down as far as trade is concerned, and it most certainly seems as if it will, we very well could break down below the 0.60 level and go looking towards the 0.58 level next. That being said, it would be a major breakdown and could throw the Australian dollar into a bit of a “death spiral”, as we would essentially be reaching multi-decade lows.
On the other hand, if this area does in fact hold, it could be the beginning of a major long-term “buy-and-hold” scenario. Obviously, anything like that would take a lot of mettle but that is exactly what long-term investing is about, finding value and hanging on to it as long as humanly possible. I don’t think we’re quite there yet, but clearly were in an area where it could start to happen.