The Aussie dollar first tried to rally during Tuesday’s trading session, hitting the ever-present level of 0.70. This is the start of significant resistance extending all the way to the 0.71 grip, so it’s worth paying close attention to. Also, the retail sales numbers were double what they expected to see out of the United States, so it’s a very good chance that the money will start flowing back to the United States again, as the Australian economy is struggling a bit in the sense that we are going to see the first deficit in decades.
AUD / USD Video 06.17.20
The real question is what is going on in China? After all, if the Chinese economy is struggling, it is a very negative sign for Australia. Parts of Beijing are already closed again, which might make people be a little cautious about investing in Australia. With that in mind, and the fact that we’re overbought, I like the idea of wiping out the Australian dollar, but I’m not looking for some sort of massive breakdown.
I think the 0.6675 level below will be crucial, not only due to the fact that this was previous resistance, but also because this is exactly where the EMA of 200 days. With that, I think at the very least we have to go backwards, but I don’t necessarily think it will be quick. On the other hand, if we were to break through the 0.71 level, then the market might burst for a bigger move.
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