The 0.62 level above is an area that should be resistive due to a large, round, psychologically significant figure being represented and several attempts to break above it. At this point, I think that a pullback makes quite a bit of sense, as we are simply going to consolidate. Having said that, if the market was to break above the 0.62 handle, it’s likely that the market could go towards the 0.63 level, possibly even the 0.65 level.
AUD/USD Video 08.04.20
The size of the candlestick is rather impressive, and the fact that we have rallied certainly is a bit interesting as well. Ultimately, the Australian dollar is a “risk on” currency, and therefore it’s likely that the currency will move with whatever the latest sentiment is when it comes to the coronavirus. That being said, a break above the 61.8% Fibonacci retracement level which is just above the 0.62 handle could open the doors to acceleration. All things being equal, this is a market that continues to go back and forth based upon the most recent headlines and of course the “flavor of the day.”
If we did turn around and breakdown below the 0.60 level on some type of massive pull back, then it’s likely that the market goes down to the 0.58 level. All things being equal, we are still within the overall range that the market has been in for the last couple of weeks, as we continue to try to figure out where we are getting ready to go next. Wait for the impulsive candlestick to break out of this 200 point range before putting money to work.
This article was originally posted on FX Empire
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