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Despite the fact that many economists believe it is quite likely that the Federal Reserve will further reduce interest rates to zero, the US dollar is quite confident across the entire spectrum of the currency market.
Even the vague plans of the White House administration to combat the coronavirus did not discourage investors from buying the US currency, which is now again perceived as a protective asset.
Let me remind you that the Reserve Bank of Australia (RBA), as well as the Fed, lowered the main interest rate, however, only by 25 basis points. However, the Australian dollar is associated as a risky asset, and it is under selling pressure in the current situation. Investors are clearly not in the mood for risk-taking.
Let's look at the charts of the AUD/USD currency pair and try to project further developments on this instrument.
Daily
On yesterday's trading, the pair fell significantly. There doesn't seem to be an opening. Bearish moods are very strong. But there must be a limit to everything, and a course correction is long overdue.
Having reached the level of 0.6213, the pair bounced back and at the time of writing, it is trying to correct. The first pullback level of 23.6 looks like the nearest target for a possible correction, according to the Fibonacci grid, which is stretched for a fall of 0.7032-0.6213. Taking into account that the broken support of 0.6435 passes a little higher, the correction pullback zone can be designated to 0.6400-0.6435. This same area is relevant to the potential sales of the "Australian".
Given the ongoing and growing coronavirus epidemic, it is unlikely that the currency market will be overwhelmed by risk sentiment next week and the situation will change dramatically.
Nevertheless, it is dangerous to sell near the minimum values; any comment from high-ranking bankers and world leaders can give a temporary respite to escape from risks and provoke a corrective pullback.
This is unlikely to happen before the end of the current auction. If the situation changes, it will most likely happen next week. However, it is unlikely that the expected and widely expected correction will be deep. It would be good to see the growth of the pair at least in the selected zone.
On the other hand, with the COVID-19 epidemic spreading around the world, volatility can be very strong and price movements can be sharp. Due to this probability of events, it is not superfluous to indicate another price zone where the AUD/USA pair may jump as part of the correction. In my opinion, this is the price area of 0.6450-0.6500, where the Tenkan and Kijun lines of the Ichimoku indicator are located, as well as the important technical and psychological level of 0.6500.
Judging by the daily chart, it is from both designated zones that it is worth preparing for sales of the Australian dollar. The global trend change is out of the question.
H1
The picture on the hourly chart confirms the relevance of opening short positions near the mark of 0.6400. As you can see, in addition to the 23.6 Fibo level, there is a 50 simple moving average, which, with such strong movements as the current downward movement, often provides resistance and sends the quote to continue the main dynamics.
For purchases, you need to see the corresponding signals of Japanese candles, and on higher timeframes - weekly and (or) daily.
Have a nice weekend!
*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.
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