The Australian dollar has rallied a bit during the trading session on Friday, as we continue to trade between the 0.7250 level and the 0.7350 level. Ultimately, this is a market that continues to see a lot of back and forth due to the fact that the Australian dollar is of course a “risk on” currency, and of course at the same time a lot of people are concerned about risk appetite right now. Looking at the chart, if we break down below the 0.7250 level it is likely that we could go down towards the 50 day EMA. Because of this, I think that we would more than likely see a bit of an attempt to push the market higher from that point. If we break down below there, then it is likely that we go down towards the 0.71 handle. There is about 100 pips worth of support extending down to the 0.70 level as well.
AUD/USD Video 23.11.20
Looking at this chart, I think pullbacks will probably be bought into, because the Australian dollar has been so resilient. Furthermore, it appears that people simply do not care that the Reserve Bank of Australia is so loose with its monetary policy, because quite frankly it may be close to the end of the rate cutting cycle. Furthermore, people expect the Federal Reserve to do something rather big sooner or later, so that could come into play as well. Australian employment numbers this week have been very strong, so that should continue to press the Aussie higher.
Whether or not we can break out right now is a completely different story, because Australia unfortunately is also tied to the global economy as it is a commodity currency. Pay attention to commodities in general, it should give you a little bit of a “heads up” of where this market could go.
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