Australian Dollar Gives Up Early Gains

The Australian dollar initially tried to rally during the trading session on Friday but gave back the gains near the 0.74 level, an area that has been important more than once. Ultimately, the market is likely to go lower if we continue to see this type of exhaustion. We have had a couple of very strong sessions proceeding the Friday session, so the question now is are we going to break out, or are we going to fall back down into the previous range?

AUD/USD Video 21.03.22

Keep in mind that the Australian dollar is getting a bit of a boost due to commodities having been on a bullish run, but you also have to keep in mind that the US dollar offers stability and safety, which is something that a lot of traders will be looking to find at this point. Ultimately, the market is a bit overdone from the last couple of days, so I think it is probably a situation where we fall back into a consolidation region.

The 0.75 level above should be resistance if we do break out to the upside. That is a large, round, psychologically significant figure and of course, will attract a certain amount of attention. On the downside, if we were to fall from here, I believe that the 0.72 level could be supported based upon previous price action.

I think the only thing you can probably count on going forward is that the Aussie dollar will be a bit choppy, but it has been a bit of an outlier against the greenback, as it has rallied where so many others have fallen.

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