AUD/USD Weekly Price Forecast – Australian Dollar Runs Into Brick WallThe Australian dollar shot straight up in the air during the week to test the 0.80 level. This is an area that attracted a lot of attention and profit-taking.
The Australian dollar during the week reached all the way up to the 0.80 level before pulling back. This makes sense, because it is a large, round, psychologically significant figure that people would be looking to take profits that, and of course has been a major structural spot on the chart going back at least 20 years that I know of. With that being the case, it is likely that we will continue to see the market struggle to break above here, but if we can clear the second thick line I have on the chart, which is at the 0.81 handle, I think at that point the Australian dollar goes much, much higher. In fact, it would probably go looking towards the 0.90 level before it is all said and done.
AUD/USD Video 01.03.21
To the downside, I think there are plenty of buyers between here and the 0.76 handle, so I think the downside is somewhat limited. I would not be overly concerned about any pullback until we were to break down below the 0.75 handle, and perhaps everybody suddenly thought that the commodity trade was ending. The idea at this point is that the Australian dollar is highly levered to copper and other commodities like that, and as they are in major demand right now, it makes quite a bit of sense that we would see the Aussie be a major beneficiary. I expect the next several weeks to be very noisy, but it still looks like a market that will have an overall upward proclivity than anything else.
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