Christopher Lewis
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The Australian dollar initially rallied during the week, but as you can see has formed a lackluster candlestick by the time, we were all said and done. With that being the case, the market looks as if it is going to continue to see a lot of choppy behavior in this area. What I find particularly telling is that the March and February monthly candlesticks were both shooting stars, and although we formed a hammer during the weekly candlestick last week, we could not hang on to any type of momentum. This is not a good look for the Aussie, so at this point I have to think that we may be in danger of falling again.

AUD/USD Video 12.04.21

If we break down below the candlestick from last week, then I think this is a market that can start to move to the downside, possibly rather quickly. Even if we drop down to my projected 0.71 level, that would more than likely be just a correction and what has been a huge move over the last several months. Quite frankly, markets cannot go straight up in the air like this forever and of course the 0.80 level above is a major resistance barrier that extends to the 0.81 handle.

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If we were to break above there, it would be a huge change in the attitude of the market overall, because it would simply become a “buy-and-hold” situation. If that happens, it will be very easy to see how we could go another eight or nine handles. Until then, this is a market that looks like we may be seeing a correction sooner rather than later.

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