Three weeks ago, the rates turned up, and today we can see the formation of an uptrend. The support line has already turned in the opposite direction, but there is reason to believe that a trend reversal will not take place this time. Perhaps we are dealing with a price correction within the old downtrend, although it is possible that the upward movement will resume later.
The current situation is caused by uncertainty and the weakness of the world economy. At the moment, no one can say exactly how long the coronavirus pandemic will last and whether new outbreaks are possible if the quarantine is softened. The situation in China, in any case, is stable at the moment and production is recovering. This certainly supports the AUD. However, today investors' fears have increased due to the increase in mortality, which resumes the decline in favor of the USD.
Avoiding risky assets, investors prefer to buy the US dollar and the Japanese yen. This week, we received encouraging data on the growth of the number of vacancies on the US labor market: it was above forecasts. This gives reason to expect an improvement in the employment situation, after record growth in the number of applications for unemployment benefits. There is also reason to believe that the US economy will recover faster after the pandemic than the Australian economy, for example, where we observed a recession even before the appearance of the coronavirus.
In the current situation, we believe that deals to SELL will be the most effective in the near future, but in the long term, the deals to BUY are also considered possible, taking into account the recovery of production in China, which means improving economic indicators and increasing demand for raw materials.
