The Australian dollar has pulled back initially during the trading session on Wednesday but has found enough support underneath the turn around and form a bit of a hammer. The hammer of course is something that people will be paying attention to, as the 200 day EMA is sitting right here and it looks like we will see a certain amount of interest in this area. That being said, there are also signs of resistance just above, as the market try to determine whether or not the trend change is in fact going to be a real thing.
AUD/USD Video 16.01.20
If the market can break above the top of the shooting star from the Monday session, it’s very likely that the Australian dollar will go looking towards the 0.7020 level, which was the recent high. A break above that level could send this market even higher, perhaps reaching towards the 0.70 level. I also think that a break above the shooting star, followed by the break of the most recent high, the market is likely to have seen a longer-term trend change. The alternate scenario of course is a breakdown, and if we can slice through the 50 day EMA and the previous downtrend line, then it means that the market is ready to continue going lower. This would be a major “risk off” situation, which could send the markets into a bit of turmoil.
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This article was originally posted on FX Empire
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