The Australian dollar initially tried to rally during the trading session on Tuesday but gave back gains rather quickly as it looks like we are going to have a little bit of follow-through from that nasty negative bar on Monday. With that being the case, it is very likely that the Aussie is going to go looking towards the lows again, especially if the commodity markets do not give it some type of boost. When you look across various commodities, you can see that apart from energy, most of them are struggling so that might be part of what coming into play at the moment.
AUD/USD Video 05.01.22
At this point, it is very possible that we go drifting towards the bottom but if we were to turn to take out the 0.73 level, that would obviously change a lot of things and could turn this market completely around. Nonetheless, that seems to be very unlikely to happen at least in the short term, but we do have the jobs number on Friday which could change things. Ultimately, this is a market that will continue to be noisy, but I think at this point time it is obvious that the US dollar is favored. The bounce that we had was rather impressive, but it is also from the 0.70 level, an area that quite frankly should cause a lot of noise. If we were to break through this area to the downside, that would obviously be catastrophic. I do not necessarily think that is the case, but I do think that we are going to continue to drift lower in the short term.
For a look at all of today’s economic events, check out our economic calendar.