The Australian dollar has fallen rather hard during the trading session on Friday, attacking the 0.67 handle. This is an area that should be important though, because it is the top of the consolidation from the global financial crisis over a decade ago. The market also has seen a bounce from here a couple of times recently, so that is something that should be paid attention to as well. That being said, the market can turn around and go positive for the Friday session, it would be an extraordinarily bullish sign.
By doing so, it could be the beginning of the end of the downtrend. Having said that, the coronavirus is still front and center in of course has a certain amount of negativity attached to the Australian dollar due to the fact that the Australian economy is so highly levered towards China. After all, China consumes 54% of all copper, and that of course is one of the major exports coming out of Australia. Furthermore, one would have to wonder whether or not there is going to be any global growth, and it now looks as if there are a lot of concerns. That being said, we are overstretched so I would expect some type of bounce in the short term if nothing else. If we were to break down below the bottom of the range for the day, that would be an extraordinarily negative turn of events, but not something that would be easily done considering how important this region has been. All things being equal, the downside is probably somewhat limited in the short term.
This article was originally posted on FX Empire
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