Australian Dollar Recovers Quickly

The Australian dollar gapped lower at the open on Monday in Asia, due to the fact that the world was worried about sanctions to the Russian Central Bank, the Russia/Ukraine war, and a whole host of other issues. However, we have turned around completely by the time New York got online and therefore it looks as if we are going to continue to pound against the 200 day EMA above. The area between 0.7250 and 0.73 continues to be a major resistance barrier, so we can finally break above there it is likely that the Aussie goes much higher.

AUD/USD Video 01.03.22

As for selling goes, I am a bit hesitant now that we have seen so many attempts to turn this market around. There is a lot of concern out there, and there will be the occasional volatile move due to so many headlines around the world that could cause issues in both directions. Because of this, you should keep your position size reasonable, knowing that we are more likely than not going to see some type of explosive move in the short term.

If we do break above the 200 day EMA, then I think we could go looking towards the 0.75 level above, which is a large, round, psychologically significant figure. If we can break above the 0.75 handle, that would be a longer-term signal that we will go much higher. On the other hand, if we were to turn around a break down below the 0.70 level, then it would continue the overall downtrend.

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