The Australian dollar has pulled back a bit during the trading session on Monday, as we have breached the 0.71 level to the downside heading into the New York session. That being said, there is significant support just below and I think that will continue to be the case. With that in mind I am looking to take advantage of any type of supportive action here as we have decidedly changed the overall attitude of the Aussie dollar over the last several months.
AUD/USD Video 04.08.20
Keep in mind that there are a lot of concerns about the coronavirus out their still, but it seems like the FX markets are more or less worried about the Federal Reserve and its loose monetary policy above all else. That has benefited the Aussie dollar over the last couple of weeks, and should continue to do so, despite the fact that Melbourne Australia is currently under a bit of a lockdown due to the virus outbreak.
Federal Reserve liquidity is a main driver of markets around the world, and FX markets are not going to be any different. Quite frankly you need to buy other things to protect your wealth that based in US dollars, so the Australian dollar is probably as good as any other asset that you can think of. This could also be a bit of a play on the Chinese economy getting a bit better, but at this point I think that is just the sideshow and not the main attraction.
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This article was originally posted on FX Empire
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