The Australian dollar initially pulled back during the trading session on Monday to kick off the week, but turned around to slam into the 0.70 level, an area that has been massive resistance. In fact, I believe that the market will see plenty of resistance above there extending all the way to the 0.71 handle. Overall, I think that it is going to take a lot of work to get above there, but quite frankly it is obvious that the Federal Reserve is doing enough torque against the US dollar that perhaps we could continue to see the Aussie gain as a result. If we were to break above the 0.71 handle, I think at that point we could be looking at a move all the way to the 0.80 level which would be a longer-term target.
AUD/USD Video 21.07.20
Looking at the downside, I think there is a significant amount of support underneath at the 0.68 handle, which is closer to the 50 day EMA area, an area that has been rather supportive over the last couple of weeks. At this point I think that there would be plenty of value hunters looking at that region to get involved with. Overall, if we were to break down below there then we could be looking at a move down to the 0.6675 handle, but at this point it certainly seems as if we are trying to form some type of ascending triangle that could send the market higher eventually. All things being equal, it is obvious that buying the dips has continued to be the easiest way to trade this market.
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