The Australian dollar has gone back and forth during the trading session on Wednesday, as we continue to see a lot of noise in general. That being said, we are most certainly trying to break out but do not have that final push quite taken care of. At this point in time I do anticipate that traders will probably continue to buy dips, extending down to at least the 50 day EMA which sits just below the vital 0.7250 level. This is an area that will more than likely continue to show its importance after we had seen it offer both support and resistance as of late.
AUD/USD Video 03.12.20
The Aussie dollar course is going to need the continued global growth story and reflation trade to work out, but the one thing that is helping right now is the fact that the US dollar is on its back foot. With that being said, I do believe that it is only a matter of time before the Australian dollar does break out, but it is probably going to take some type of headline or event to make that happen. In the meantime, I think we are essentially “killing time” in trying to digest gains.
To the upside, if we break above the 0.74 level is almost assured that we will go looking towards the 0.75 handle next, which of course is a large, round, psychologically significant figure. There would be a lot of interest in the market at that point, so clearing the 0.75 level could kick off the next leg higher if and when it actually happens.
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