The Australian dollar initially rally during the trading session on Friday but pulled back a bit and when I think is probably more profit-taking than anything else. Let us be honest, the US dollar has been on its back foot for quite some time and it makes quite a bit of sense profits going into the weekend. We have seen the Euro pullback as well, so I think this is an overall theme of the day. However, looking at the hammer that formed on Thursday suggests to me that the market is more than likely just going to grind sideways in this general vicinity, giving us an opportunity to pick up value on a small dip.
AUD/USD Video 03.08.20
I believe that there is significant support at the 0.71 handle extending down to the 0.70 level, so it is very likely that we continue to see people jump into this market on these dips to take advantage of what has been an extraordinarily positive run for the Aussie over the last several weeks.
To the downside, as long as we can stay above the 0.68 handle, I do not think much will have changed in the overall attitude. What is interesting to me is that breaking above the levels that we have suggests that this pair could go to the 0.80 level, something that is most certainly worth watching. This suggests a longer-term trend change, but these things of course have to have the occasional pullback. I have no interest in shorting the Aussie anytime soon, as the Federal Reserve continues to flood the financial markets with US dollars.
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