The Aussie dollar was relatively quiet on Thursday as we await the Non-Farm Payrolls number on Friday. As we are sitting at the 0.72 level, it does make sense that we would see a little bit of a hesitation, as this area has caused resistance previously. Nonetheless, the sets up for a relatively straightforward trading environment if we get the correct move.
AUD/USD Video 07.08.20
On a pullback towards the 0.71 handle, or even just a bit below, I would be interested in buying the Australian dollar as it has shown itself to be rather supportive. Furthermore, it goes along with the massive trend that we have seen for some time. Regardless, you certainly cannot short this market due to the fact that the Aussie has been on fire and of course the Federal Reserve continues to devalue the US dollar in general, through monetary policy and loose financial actions. With that being the case, and perhaps the global economy trying to recover a bit quicker than some people thought, there is an argument to be made for the Australian dollar to rally.
When quite often overlooked factor is the commodity markets on the whole, and how hard commodities are doing, specifically metals. With copper, silver, and gold all doing very well, that clearly helps the Australians as they supply a lot of that to China. This does not even take into account the iron ore prices that have gone higher, nor does it look at the aluminum pricing. At this point, it looks like we will eventually go looking towards the 0.80 level.
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