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Christopher Lewis
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AUD/USD

The Australian dollar initially tried to rally during the trading session on Wednesday but gave back early gains to drift back below the 0.78 level by the time New York got on board. Nonetheless, we are looking at the 50 day EMA underneath as a potential support level. The 50 day EMA is grinding higher, so therefore it is possible that we would see that area offer support yet again. However, it may not be that simple when you look at the longer-term charts.

AUD/USD Video 4.03.21

The monthly candlestick for February was a shooting star, so the question is “Are we about to change the overall trend?” This is something to be very cautious about because it would imply that we could see a major shift in the overall attitude of markets globally. That being said, it does make sense that we pulled back from the 0.80 level, as it is a major pivot point for the longer-term charts, even on the monthly timeframe. In other words, if we can break above the 0.81 handle, which is the top of that range, then the market could go much higher, perhaps as high as the 0.90 level it would certainly be a longer-term “buy-and-hold” situation that could be very influential when it comes to Forex markets in general.

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Furthermore, I think that it will be a “add on the dips” type of situation if we do break out. On the other hand, if we do turn around and break down below the 0.76 handle, we could very well find this market dropping a couple of handles pretty quickly.

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

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