The Australian dollar has gone back and forth during the trading session Monday to kick off the week a bit lackluster. This exhaustion is quite normal considering we have gone straight up in the air. Furthermore, there was a gap, although it has been filled, right in the same area. Because of this, there’s probably a significant amount of interest in this area, and therefore we should see some type of reaction. If the market can break above the 0.6250 level, then it would be a very strong signal for the buyers to push this pair towards the 0.65 handle.
AUD/USD Video 31.03.20
On the other hand, if the market was to break down below the 0.61 level, we probably drop another 100 pips before finding support at the psychologically important 0.60 handle. Keep in mind that the Australian dollar is highly sensitive to risk appetite so we will have to pay attention to that to say the least. At this point, the Australian dollar is going to be highly influenced by the global supply chain, and whether or not it is functioning. The Australian dollar will move back and forth due to perception, but it should be noted that the Federal Reserve is stepping in and flooding the market would dollars so that would be the one thing that’s probably a push this higher. Either way, keep your position size relatively small, because you can be stopped out rather quickly based upon a headline that spooks the market. That being said, it does seem like the markets are starting to settle down a little bit, perhaps getting used to the idea of the new paradigm that the world find itself in.
This article was originally posted on FX Empire
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