The Australian dollar has gone back and forth during the course of the trading session on Friday as we continue to see a lot of back and forth action in a market that simply does not seem to be able to break above the 0.78 level. The 0.78 level has been like a brick wall for quite some time, although we did race towards the 0.80 level at one point in time. The 0.80 level continues to be a massive amount of resistance that extends to the 0.81 handle as well, so I do see that the Australian dollar has a lot of work ahead of it in order to finally break out into a “buy-and-hold” type of situation.
AUD/USD Video 03.05.21
To the downside, the 50 day EMA underneath offers significant support, as it sits at the psychologically important 0.77 handle, an area that has seen quite a bit of support over the last couple of weeks. If we break down below there, then you are looking at a move down to the 0.76 handle, and then the 0.75 handle. Breaking down below there could change the overall trend for the next several months, and it is worth noting that the February candlestick was a shooting star, just as the market candlestick was less than impressive. As we close out the April candlestick, we have a much more bullish candlestick, but it still has failed to break above that resistance. In other words, this is a market that is probably going to be very choppy in the short term, so I think scalping is probably about as good as this market gets.
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