The Australian dollar has been a bit tricky to trade as of late because we have such negative monthly candlesticks that have printed in both February and March, but at the same time the market has refused to break down significantly. After all, the market has been in an uptrend for months, so even though we have had a couple of bad candlesticks on the longer-term chart, the reality is that the 0.75 level still has held as significant support. It is because of this that the Australian dollar has been a bit of a head scratcher as of late.
AUD/USD Video 28.04.21
The range from the candlestick during the previous session certainly was very bullish but closed below the crucial area of resistance that has been such a thorn in the side of the buyers. It is because of this that if we break down below the candlestick from the Tuesday session, I think this market probably goes much further to the downside. However, if we were to turn around a break above the 0.7850 level it will open up the possibility of a move to the 0.80 level above which is a huge resistance barrier on the monthly charts, going back multiple decades.
I do think that is going to be difficult to break above the 0.81 handle to open up a longer-term “buy-and-hold trade.” However, if we do that move, I will certainly be holding on to the Aussie for at least five handles, if not a move of 10 handles at that point. This may be part of the reason why it has been so difficult to rally, as the market determines whether or not it truly can make that momentous of a move.
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