Australian Dollar Continues to Hover at the Same Level

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied during the trading session on Monday as we continue to consolidate in general. The 0.75 level continues to be an area that I think you will see a lot of noise in, but quite frankly we are a bit stretched. Furthermore, it is also an area that has been resistant more than once, so it is worth paying attention to. The market will be rather noisy in this area and could be difficult to push to the upside. However, keep in mind that the Australian dollar is highly levered to commodities so that is without a doubt working in its favor.

If we were to break down below the 0.74 level, then it is very likely that we will see a drop from here, more likely than not in reaction to a larger “risk-off” type of situation. In that scenario, I believe that the market will eventually find its way back to the 0.7350 level. You would probably see the US dollar strengthening against most currencies in general, it would not just be in this market.

For longer-term traders, it might be worth noting that we just had the so-called “golden cross” happen as the 50 Day EMA has broken above the 200 Day EMA. While that is typically a very late signal, the reality is that some longer-term big money managers will look at that as a reason to get long and will more than likely hang on to a position much longer than you imagine. Regardless, the Australian dollar has been bucking the trend as it has been bullish against the US dollar, so if we get a general run towards safety, this thing could unravel.

AUD/USD Technical Analysis Video 05.04.22

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