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Christopher Lewis
AUD/USD

The Australian dollar rallied significantly during the week, reaching towards the crucial 0.70 level yet again but then failed to break out. With this in mind I believe that this is a market that continues to struggle with this level, and I believe that this level is actually a “zone of resistance” that extends to the 0.71 handle above. Because of this, I do not have any interest in buying this pair until we break above the 0.71 handle, but at that point I think we could open up a move all the way to the 0.80 level without too many problems over the next several months.

AUD/USD Video 13.07.20

Be aware the fact that the Australian dollar is highly levered to the Chinese economy and global growth in general, but I think what is driving this pair more than anything as of late will be the Federal Reserve and its desire to crush the US dollar. Eventually they will probably get what they want, unless of course the pandemic situation gets much worse.

If that were to be the case, then no matter what the Federal Reserve does it is likely that the Aussie will take it on the chin. To the downside I think that the 0.68 level continues to be rather supportive but does make a nice short-term target. Breaking down below their opens up the possibility of a move towards the 0.6675 handle, but with the recent price action it is not going to be an easy trade one way or the other.

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

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