Australian Dollar Breaks Out

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied rather significantly during the Tuesday session as the Reserve Bank of Australia has dropped the word “patience” from the statement, suggesting that perhaps they are looking at tightening sooner than originally thought. That being said, commodities have been driving this market higher, and based on the price action that I was observing during the day on Monday, it seems as if somebody knew something. This is quite common, as there is a lot of money to be made by front running the market.

That being said, we have now smashed through quite a considerable amount of resistance, and it looks as if the Australian dollar will become more of a “buy-and-hold” type of currency, perhaps reaching the 0.78 level. The market is likely to continue to be noisy but still figures out to be a relatively bullish market. As long as we can stay above the 0.7450 level, I believe that the uptrend is very much intact. Beyond that, the 50 Day EMA has just crossed above the 200 Day EMA, forming the so-called “golden cross.”

The size of the candlestick is rather impressive, and therefore it is likely that there will be plenty of people chasing this trade. This does not necessarily mean that I would be a buyer at this point, rather I would wait for a bit of value to present itself on a dip, assuming that we even get that opportunity. Ultimately, this is a market that I think you cannot short anytime soon, so it simply a matter of looking for a bit of an opportunity going forward.

AUD/USD Technical Analysis Video 06.04.22

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