Australian Dollar Bounces From Major Level

The Australian dollar has rallied early during the trading session on Monday as the RBA has a meeting during the early hours on Tuesday. With this being the case, the market is more than likely going to be paying attention to whether or not the Reserve Bank of Australia can walked back the idea of quantitative tightening, or at least getting rid of quantitative easing. Obviously, a lot of this will be about the statement and how the world reacts to it, but it is worth noting that the 0.70 level is a major support level that a lot of people have been paying attention to.

AUD/USD Video 01.02.22

Quite frankly, if there is a place where the Aussie dollar should stabilize its right in this general vicinity. That is why the next candlestick for the daily timeframe will probably be so important. Ultimately, if we do break down from here then the Aussie dollar is in serious trouble. On the other hand, if they do start to talk about tightening, then it should bring some strength back to the Aussie, perhaps sending it higher. As things stand right now, you could make an argument for a bit of a “double bottom” trying to form, but it still early days.

The US dollar is a little overextended regardless, so that may help as well, but in the end, it is likely that we will see continued concerns about risk appetite and the overall global economy. With this being the case, the Aussie has a bit of an uphill battle, but the central bank of course could have a lot to say as to where we go next.

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