The Australian dollar has plunged during the trading session on Thursday, as we continue to see a lot of “risk off” trading out there. Ultimately though, we are getting close to a major support level so it’s interesting to see whether or not the Aussie can hold this general vicinity. Quite frankly, this is a market that is highly levered to China and that is part of the problem. Furthermore, it’s not even about the coronavirus in China at this point, but rather the rest of the world is probably going to slow down and therefore there will be less demand for those Chinese goods.
AUD/USD Video 13.03.20
The Australian dollar has recently seen a massive turnaround at the 0.63 handle, and therefore it will be interesting to see whether or not we can break through there. One would have to think that if we do it opens up the door down to the 0.60 level rather quickly. That being said, I think that level giving way is a real possibility so it’s something that you should be paying attention to. There are also possibilities that we could see some type of “rip your face off rally” in the short term, just as we had seen a few days ago. Unfortunately, the market is moving on the latest headline, and that’s almost impossible to prepare for other than to protect your trading capital. The easiest way to do that of course is to trade very small.