The basic elements
The Aussie starts the new week with a holiday. However, the panic caused by Corona virus still caused the AUD to sharply decline at the opening, setting the lowest level in many weeks near the level of 0.6815.
Chinese officials confirmed more than 2,000 infections and 56 deaths from coronaviruses, a nurse said 90,000 had contracted. The United States has also confirmed the fifth case while Sydney and Japan are also in the area affected by this deadly virus.
Chinese authorities extended the New Year holiday until February 2, with schools taking indefinite leave to focus better on finding ways to treat the virus.
All eyes are now on the World Health Organization (WHO) when the agency last week declared the virus a global threat.
Elsewhere, Bloomberg said the Trump administration expanded its tariffs on imported Aluminum and Steel. Meanwhile, the US Embassy in Iraq continues to suffer missiles, although the Iraqi government has condemned such attacks on foreign troops in the country.
The above information shows that the market is now risky for investors, they will turn to the US dollar and ignore the Australian dollar risk. This will make AUD more likely to continue to decline in the near future.
On the daily chart, AUDUSD shows a strong bearish force when forming higher and lower highs, creating a bearish trendline towards the Demand zone of 0.677. If the demand zone breaks, AUDUSD will head towards the weekly demand zone at 0.67. This will be the area that determines the trend of the AUDUSD pair in the long term. Currently, in the case of a strong demand of 0.677, the price will break the trendline and recover its uptrend. AUDUSD is under a lot of downward pressure, but buying up near the Demand and Day days is not a good decision. Therefore, it is necessary to have a confirmation (break down of the trendline) to execute buy orders and stop loss below the Demand zone.
Stop loss 0.675
Take profit 0.6845
Recommendation: This is just a Trading Idea. For more accurate analysis, you should incorporate other indicators that you have mastered. In particular, always focus on capital management methods to prevent any possible market situation.
Author: Nguyen Chi Thanh