The Australian dollar initially pulled back a bit during the trading session on Wednesday, but turned around to show signs of strength, as we reached towards the 0.62 level. At this point, the market breaking above that level and the 61.8% Fibonacci retracement level which is just above there could send the Australian dollar much higher. Remember, the Australian dollar is highly sensitive to risk appetite so pay attention to how the markets are perceiving that right now. The stock markets continue to be extraordinarily resilient, but the question will be what happens going forward, and whether or not some of the rally is a relief rally, or if it is something a bit more important.
AUD/USD Video 09.04.20
Australia is also highly sensitive to China, so if China starts to increase demand and output, that could be a good sign for the Australian dollar in general. That being the case, don’t expect any move to be easy to deal with, as there will be a lot of headlines out there that will cause concerns. Nonetheless, we do look as if we are trying to form some type of bottoming pattern, so on the breakout one would have to think that we will eventually go looking towards the 0.65 level, although how long it takes to get there could be just about anyone’s gas. To the downside, it looks as if the 0.60 level is now offering massive support. At this point, the Aussie certainly looks as if it is trying to build bullish pressure.
This article was originally posted on FX Empire