The Australian dollar has done little during the trading session on Monday, as many of the large economies around the world were celebrating various holidays. Because of this, it should not be a surprise that we have done nothing. Looking at the chart though from a longer-term perspective, we have recently pulled back from the 200 day EMA so it should be very resistive in this general vicinity anyway.
AUD/USD Video 26.05.20
Looking at the chart, the 50 day EMA is racing higher and as a result it is likely that we could see a bit of a squeeze coming relatively soon. The question now is whether or not it is higher or lower? I suspect it is probably lower, unless of course we get some type of major move into risk appetite, which I just do not see that happening. There are a lot of questions out there when it comes to the global economy, and it is difficult to imagine that things are suddenly going to change anytime soon.
I anticipate that we will continue to test the 0.66 level, before pulling back from there and trying to break down again. However, if we break above the 0.67 level, we will have broken through massive amounts of resistance, and go looking towards a major trend change for the longer term. If that does happen, becomes more of a “buy-and-hold” type of marketplace where people simply hang on to the Australian dollar because the entire global economy is starting to go positive again. That seems like a tall order, but it is basically what is going on.
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