The Australian dollar has gotten hammered during the week, reaching down towards the 0.67 level. Ultimately, the market will continue to see a lot of interest in this area though, because we have not only bounce from here recently, but it is also the top of the consolidation area from the financial crisis. That being said, there should be plenty of negativity out there as well though, because the markets are so concerned about the coronavirus.
With China being one of the largest consumers of copper the world, coming in at 54% or so of the entire global demand, it makes sense that the Australian dollar gets hammered as the Australian economy certainly will feel the pinch from this type of action. With the Chinese closing factories, it’s obvious that demand for copper will continue to crater. In fact, copper itself has been crushed over the last two weeks, losing massive amount of value.
If the market does bounce from here, one would have to think that there is a ton of resistance though, so we need some type of good news to make this a viable longer-term trade. That being said though, we are most certainly at a spot on the chart that if it was to find a perfect spot, it would be here. That being the case, the market is in an area where we can look for some type of stability, but we just don’t have it quite yet. This however will be an area that I would be paying attention to.
This article was originally posted on FX Empire
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