The Australian dollar has initially fallen during the trading session on Friday but found enough buyers underneath the turn things around and show signs of resiliency yet again. Having said that, the resistance barrier at the 0.70 level is still very much intact, and I just do not see an argument for the market to break through there suddenly. Obviously, it is an area where we have seen a lot of sellers, but I think it is also a bit of a range that extends all the way to the 0.71 handle. If we were to somehow break above the 0.71 handle, then it would be a massive trend change, and we would see the Australian dollar continue to go much higher, perhaps making a run towards the 0.80 level.
AUD/USD Video 13.07.20
To the downside I see plenty of support at the 0.68 level, and it would not surprise me at all to see the market reach back towards that area but I will say this about the Australian dollar: it has clearly shown just how resilient it is going to be. I do not know that this has anything to do with economic conditions, it is probably more about the Federal Reserve flooding the market with liquidity. That of course works against the value of the US dollar so it could send the Aussie much higher by default. That being said, Australia is highly levered to the Chinese situation which has been getting better but is still tenuous at best. With this, I expect to see more choppy behavior over the next several trading sessions.
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This article was originally posted on FX Empire
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