In what can basically be described as a continuation of sideways behavior, the Australian dollar has bounced from the 50 day EMA to show signs of life again. Ultimately, the market looks as if it is trying to build up enough momentum to finally break above the 0.78 level, an area that has been like a brick wall for this market. We did break above there once, and then collapsed from the 0.80 level. 0.80 level is a massive level on the charts when it comes to the monthly timeframe, and if we managed to break above there and clear the 0.81 handle, that could open up a move all the way to the 0.90 level.
AUD/USD Video 04.05.21
This is probably going to be based upon the commodity super cycle that people claim is going on right now, and it certainly would make a lot of sense. However, price simply cannot break above the 0.78 level right now, and that something that you have to pay attention to. After all, it does not matter if you are “correct in your analysis” if you do not get the timing right. With that being said, a break above the 0.78 level has me buying and then looking towards the 0.80 level. On the other hand, if we turn around a break down below the 0.75 level, I will become very bearish on this pair for several months. Remember that the commodities markets will have their say, but gold is not helping the situation, so perhaps that is part of what is going on here.
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