Aussie Dollar Sideways

The Australian dollar has gone back and forth during the Monday session to show signs of hesitation and exhaustion in this relatively important area. The 0.74 level has been important more than once, and therefore it is obvious that the market needs to figure out where its momentum is going to come from next. At this level, we have seen a significant amount of resistance previously, and therefore it does make a certain amount of sense that we ran out of momentum.

AUD/USD Video 22.03.22

The 0.74 level offering resistance opened up the possibility that we get a pullback. If we break down below the Thursday lows, then it is likely we go looking towards the 200 Day EMA underneath. That being said, there are probably buyers underneath there, based upon the commodity trading more than anything else. Remember that the Australian dollar is highly levered to commodities, which of course have been on fire as of late. With that being the case, I think the market is more likely than not going to continue to see buyers on dips, bucking the overall trend of US dollar strength against so many other currencies.

If we were to break above the highs of the Monday session, then it is likely that we go looking towards the 0.75 handle above, which is a major round figure that will attract a lot of attention. Breaking above that level then opens up the possibility of a “buy-and-hold” type of position. On the downside, if we break down below the 200 Day EMA, then it is likely we go looking towards the 0.72 handle, maybe even the 0.70 level longer-term.

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