The Australian dollar did very little on Tuesday as we continue to bounce around above the 0.71 level. This pair probably breaks out to the upside.
The Australian dollar has done very little during the trading session again on Tuesday as we continue the overall sideways grind that has been a mainstay of this pair lately. Ultimately, this is the midst of vacation season, and that could be one of the biggest problems. With the market seemingly uninterested in moving very much right now, you are probably better off scalping this market back and forth for short-term gains.
AUD/USD Video 26.08.20
I do believe ultimately; we break out to the upside and Jerome Powell may say something this week that is dovish enough to make the markets happy. That being said, I also recognize that market participants will continue to focus on the US dollar, so this is probably less about the Aussie dollar and more about the greenback. Longer-term, I believe that this market will probably break out and go looking towards the 0.75 level, but it is hard to tell how long it is going to take to get there.
After all, we have shot straight up in the air for some time now, and therefore one would have to think that the market will have to digest some of these gains for a while. To the downside, I think that the area between the 0.71 and 0.70 level should be massive support, but even if we were to break down below there, I believe that the 0.68 level should also offer significant support, due to structure and the ever present 200 day EMA. Buying on dips could continue to work for a while.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.