The Australian dollar has rallied a bit during the course of the week, reaching towards the 0.7350 level. This is an area that has offered resistance previously, and it is not a huge surprise that we could not break above there by the end of the week. The 200 week EMA sits below the weekly candlestick from the previous week, so that could offer a bit of a support level. If we can break above the 0.74 handle, then it is likely that we could go higher.
AUD/USD Video 23.11.20
Short-term pullbacks will continue to be bought into from what I see, extending all the way down to the 0.70 level. That being said, the RBA is likely the biggest hurdle for the Aussie dollar right now, right along with the slowing down of the global economy due to the coronavirus lockdowns. The question now is are investors looking past this time and start looking towards life after the vaccine, or are they worried about the damage between now and then?
Ultimately, pay attention to the commodity markets as they could give you a bit of a “heads up” as to where the Aussie goes longer term. That being said, I do not necessarily think that we have an easy break out right now, but the longer-term attitude certainly seems to be more to the upside. However, if we were to turn around a break down below the 0.70 level, the market is likely to fall rather hard. That being said though, I do not think it happens anytime soon and the Federal Reserve continues to loosen monetary policy going forward, keeping that all but impossible unless we get some type of economic shock.
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