The Australian dollar has gone back and forth during the course of the week to show a little bit of hesitation with the negativity. If we can break down below the hammer from the previous week, then it is very likely that we go towards the 0.70 level, an area that I do think is a very real possibility as Australia continues to lock down its economy. This could send Australia into a “double dip recession”, which of course will cause major issues for the currency and of course the overall economic health of Australia.
AUD/USD Video 02.08.21
Furthermore, we are starting to see issues with the Chinese economy and therefore the Australians may suffer at the hands of that as well. The economic numbers in China have been less than impressive lately, so ultimately this is a market that I think will suffer. If we bounce from here, then it is likely that the 0.75 level above is going to be a significant resistance barrier based upon the previous action that we had seen and of course the fact that it is a large, round, psychologically significant figure.
One thing is for sure, this is a market that will continue to be very choppy and difficult to say the least, so with that being the case it is possible that the market is one that you are going to have to be very patient with, but it should eventually give us one of the signals to get short. On the other hand, if we were to take out the 0.76 level, then it is likely that the market would go looking towards the 0.78 handle.
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