Australian Dollar Continues to Try to Recover for the Week

The Australian dollar has rallied during the course of the week, but it looks as if we are still running into a bit of trouble between here and the 0.73 level above. Because of this, I think is probably only a matter of time before we see some type of decision being made for a longer-term move, but at this point in time I think the 0.70 level is being considered a potential “floor the market”, which is also a large, round, psychologically significant number and a potential double bottom.

AUD/USD Video 21.02.22

If we can break above the 0.73 level, then it is possible that we could go looking towards the 0.75 handle. This would obviously be a big “risk on” type of move, which is something that we could see if the tensions between Russia and Ukraine continue to drop. After all, geopolitical concerns are a bit difficult to quantify, but one thing is for sure, if the Russians cross into Ukraine, it will have people running for safety and thereby the US dollar.

If we were to turn around a break down below the 0.70 level underneath, then the market could go looking towards the 0.68 handle. If we can break above the 200 day EMA above, then it is possible that we could go looking towards the 0.75 level. It is simply a “binary decision” as to whether or not we are going to go “risk on” or are we going to go “risk off”. I do think that the next couple of weeks should give us an idea as to where we are going longer term.

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