Australian Dollar Gives Up Early Gains

The Australian dollar has shown itself to be overextended during the trading session on Monday, as we reached above the 0.74 level. It looks as if we are trying to form some type of topping pattern for the short term, but I think this might end up being more or less just a pullback. Yes, I recognize that commodities will have a major influence on what happens next with the Aussie, but there is also a lot of fear out there and therefore it is likely that we will continue to see the US dollar be somewhat attractive.

AUD/USD Video 08.03.22

That being said, I think a pullback more than likely offers a buying opportunity, but we probably need to fall for a couple of days before you can really get excited about it. On the upside, the 0.75 level will continue to be an area that a lot of people pay attention to, and I think it would be the target for the longer-term bullish traders out there.

Keep in mind that the Aussie is moving based upon commodities more than anything else at the moment, but if we get a sudden run towards the US dollar, it will eventually wear on the Aussie as well. It will be an interesting couple of weeks, as we have so many different moving pieces. Regardless, it does look a little exhausted here so a pullback would be anticipated.

For what it is worth, the 200 day EMA sits right around the 0.73 handle, so that is an area that we may see targeted for profit-taking to the downside and perhaps an area where people will be looking to pick up a little bit of value to the upside.

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