Australian Dollar Continues to Look Very Threatened

The Australian dollar has struggled yet again during the trading session on Friday, as we continue to see a lot of negativity. That being said, the Australian dollar of course is sensitive to all things negative, and of course China. As there are concerns coming out of Asia, it is worth noting that the selling of stock markets over there has been quite drastic. Looking at the chart, if we can break down below the lows of the Friday candlestick that confirms that we are going much lower.

AUD/USD Video 31.01.22

You should also be aware the fact that we are below the 0.70 level, which is a major area of support. If we can keep this up, then this could be a nice longer-term signal. At that point in time, we are likely to see a continuation of a move to the downside, and therefore could go looking as low as the 0.68 level. The 0.68 level being broken down opens up the possibility of the 0.66 handle, both areas that we have seen action at previously.

On the other hand, if we turn around and bounce above the 0.7050 level, that could give us another relief rally, and therefore I will be paying close attention to how we close at the end of the day as it gives us an opportunity to take advantage of what the market uses as a verdict for this level. At this point in time, I still like the idea of fading rallies if we do get them, but I am just as easy with the idea of shorting this market now that we have broken down to a fresh, new low as well.

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