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Christopher Lewis
AUD/USD

The Australian dollar initially pulled back during the trading session on Tuesday to retest the area of the 50 day EMA. It is worth noting that we have turned around and rally from there to reach towards the 0.78 level. Ultimately, the market looks as if it is going to try to reach towards the highs again, which is at the 0.80 level, a very psychologically and structurally important place on the chart.

AUD/USD Video 3.03.21

That level extends to the 0.81 level, and the reason I bring so much attention to it is that if we can break above the 0.81 level, it is very likely that we kick off another “buy-and-hold” type of move. This is based upon the idea of commodities continuing to rally and of course the reopening trade really kicking things in the pants. Nonetheless, we are in an uptrend, but it is worth noting that the monthly candlestick from February was a shooting star, so I do think that it is going to be very difficult to break out to the upside in the short term. Quite frankly, I think it is going to take a significant amount of work that traders may have to be very patient to deal with.

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Given enough time, we will have to decide whether or not commodities are going to go higher. If they do, then the Australian dollar will eventually head in that direction. Otherwise, if we were to break down below the 0.75 handle, it is very likely that this market could break down rather significantly. As we are essentially in the middle of this range, I think that a lot of back and forth over the next several days will probably be the most likely outcome.

For a look at all of today’s economic events, check out our economic calendar.

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