The Australian dollar looks as if it is stalling just a bit near the 0.79 handle, and an area that begins significant resistance, especially as we get closer to the 0.80 level. The 0.80 level above of course is even more important from a psychological standpoint, so with that being the case I think that we will be looking at a pullback from that area, and most clearly the 0.80 level will be crucial for the longer-term trend.
AUD/USD Video 24.02.21
If we can break above the 0.80 level significantly, that could open up a move to the 0.90 level over the next several months. Remember, this pair is highly sensitive to the idea of the “reflation trade”, and of course commodities picking up demand due to the idea of the vaccinations allowing the economy to reopen. Furthermore, the Australian dollar is seen a bit of momentum pick up due to the idea of the Chinese having more demand for iron and other minerals coming out of Australia.
At this point, I think we are likely to see a little bit of a pullback in order to find value underneath, perhaps near the 0.78 level, which is an area that has been previous resistance. At this point, the market should find plenty of people looking to get involved in that general vicinity, perhaps in order to find a little bit of value to get the uptrend really going. The 50 day EMA underneath has offered significant support, and I do believe that we are likely to see plenty of interest on dips as the uptrend has been so strong for several months.
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