The Australian dollar has gone back and forth during the course of the week, showing signs of confusion. Nonetheless, once worth noting is that we are sitting on top of a rather significant short-term resistance area that has been broken. In other words, it does suggest that buyers might come back in, which would make a certain amount of sense if commodities continued to take off to the upside. That being said, if they do not, then it will work against the value of the Aussie.
AUD/USD Video 14.03.22
The noisy nest will continue regardless, due to the fact that the US dollar is favored in times of concern, and we are most certainly in a time of concern. As long as that is going to be the case, even if the Australian dollar is rather bullish, think it does limit the upside to a point. In a bullish move, we might go looking towards the 0.75 level, but I would anticipate a significant amount of resistance there.
On the downside, if we break down below the candlestick from the previous week, then we could open up a move down to the 0.70 level. That would obviously be a major “risk-off” move, and therefore could send this market into a bit of a tailspin, because I anticipate that the US dollar would pick up against almost everything. That being said, the Aussie is a little bit of an outlier at the moment, mainly due to hard commodities continuing to attract a lot of attention. If that rolls over, the Aussie will get absolutely crushed as it is the only thing really keeping it up.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
