Australian Dollar Reaching Towards Resistance Again

The Australian dollar has rallied a bit during the course of the trading session on Wednesday to reach towards the 0.7250 level, an area that is close to the “brick wall” that formed at the 0.7275 handle. If we can get above that “brick wall”, then the Aussie could very well break out and go looking towards the 0.75 handle over the longer term. That being said, it has been very difficult for this market to break out to the upside so it will be interesting to see whether or not it can actually do that. It would obviously be a very strong sign, considering we tried to do so six days in a row and failed.

AUD/USD Video 13.01.22

If we do fail at that level again, it is very possible that we could see a move down towards the 0.7150 level rather quickly, followed by an attempt to get to the 0.70 level. What is going to be tricky about this is that the Australian dollar is so highly levered to the Chinese economy that it seems like we need some kind help from the mainland to really get moving. Nonetheless, we are getting help from a falling US dollar, so that might end up being the catalyst after all.

Keep in mind that commodities of course are highly sensitive to the Aussie and therefore you need to be cautious and pay close attention to something like the CRB Index. Nonetheless, this is a market that is about to make a move one way or the other and it certainly will be worth paying close attention to.

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