Australian Dollar Attempting a Big Breakout

Australian Dollar Technical Analysis

When you look at the chart, you can see that this is an area that could cause pretty significant resistance. If we can break above the highs of the day, that could open up the possibility of a bigger move. The Australian dollar is highly levered to commodities, and that most certainly has been a huge benefit over the last several days. The commodity markets are on fire so that most certainly will continue to have an influence on the Aussie.

Having said that, the market is a little bit overbought at this point, and the fact that we are starting to see signs of hesitation should not be a huge surprise considering where we are on the chart. The market has been overdone, and a pullback towards the 0.74 level would make sense. That could give the possibility of a move higher a little bit more in the way of momentum because when you slam into a resistance barrier with a parabolic move, it typically runs out of momentum.

It is worth noting that the 50 Day EMA is rising, and it looks as if it is trying to break back above the 200 Day EMA. This forms the so-called “golden cross”, which a lot of longer-term traders look at as a very strong longer-term “buy-and-hold” signal. That being said, it also assumes that we are going to have a huge “risk-on” type of environment, which may or may not be a bit of a stretch at this point. Looking at this chart, a pullback does not necessarily mean that you should be a seller, just that it might offer a little bit of support underneath that in turn offers value.

AUD/USD Technical Analysis Video 28.03.22

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