The Australian dollar has rallied a bit during the trading session again on Tuesday, as we are getting so overstretched it is quite remarkable. With the reopening of economies in the fact that Australia has taken negative rates off the table, the Australian dollar has been plowed into. Having said that, it is a bit difficult to see who is left to start buying. However, you clearly cannot just jump in and start shorting as it has been so massive in its move. Because of that, it is a matter of simply waiting to see whether or not we rollover.
Keep in mind that the Australian dollar is highly levered to the global trade situation, and that of course is something that is not going to do quite so well, so this is one of those things that eventually once the trade rolls over, this could be a huge one.
AUD/USD Video 03.06.20
Looking at longer-term charts, we are approaching a major support and resistance level on the monthly chart, so things are lining up by the resiliency has been quite impressive. Because of that it is going to be crucial to be overly cautious about entering if you are trying to short this market. Having said that, if we break above the 0.70 level, I think it is only a matter of time before the market takes off for a multi-year move, something that you can hang onto. Having said that, we are definitely getting to a point where longer-term traders are going to make their presence known.
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This article was originally posted on FX Empire
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