The Australian dollar has rallied a bit during the trading session on Thursday, as we continue to see attempts to reach the 0.70 level, but it is an area that has a significant amount of resistance built into it. Furthermore, that resistance extends all the way to the 0.71 handle, so I do feel that it is only a matter of time before market participants continue to push lower. In fact, you can say that we are simply consolidating between the 0.70 level on the top and the 0.68 level on the bottom. The question now is whether or not it is going to be consolidation that leads to continuation, or is it going to be the end of the massive rally?
AUD/USD Video 03.07.20
I think at this point it is a bit difficult to tell. This is because we are heading into what is typically an incredibly quiet time of year, and of course the market is focused on a plethora of different issues at the same time. The US/China trade situation continuing to deteriorate in an election year with a pandemic raging would in and of itself suggests that we should see a massive “risk off” move, meaning that the Aussie should get hammered.
However, the Federal Reserve is throwing so much liquidity into the marketplace that the US dollar is not gaining the kind of strength that you would anticipate. The jobs number was better than anticipated on Thursday, so that helps the risk appetite as well, but at this point it looks as if the market is simply killing time and waiting for some type of significant news.
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This article was originally posted on FX Empire
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