The Australian dollar initially tried to rally during the trading session on Tuesday, reaching above the 0.78 level before pulling back. That is an area that has been quite resistive more than once, so it should not be surprising at all that we have found sellers in that area. That being said, I do think that the market probably continues to go higher as long as the US dollar itself continues the weekend. This is moving mainly based upon the greenback than anything else, so that something that we should be paying close attention to.
AUD/USD Video 21.04.21
However, it is very possible that we get some type of pullback in this area, perhaps reaching back towards the 0.77 handle. One thing that does help the bearish case is that we have formed a shooting star on both the February candlestick and the March candlestick. That of course is a very negative sign, so we will have to wait and see how that plays out. This pair should continue to be very noisy, and if we can break above the 0.78 level it is likely that we go looking towards the 0.80 level. That area extends all the way to the 0.81 handle, and therefore it will be worth paying attention to because if we can break above there then the Australian dollar becomes a “buy-and-hold” situation.
All things been equal, it is likely that we are going to see choppy behavior at best, so that something that you should keep in the back of your mind. Ultimately, I do think that we will get some type of bigger move but in the meantime, we should probably be cautious about position sizing more than anything else and recognize that the pair will probably be quite difficult to get a handle on.
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