Australian Dollar vs. US Dollar Technical Analysis
The AUD rose slightly early Monday morning, but this is a repeat of the same trend. It appears to be chipping away at a major resistance near the 0.68 level. If we can break above this level, then I think the 0.6850 level will be our target, and then we’ll be able to move up a bit more freely. That being said, if you look at the last few weeks, we’ve seen quite a bit of upward momentum, but not enough to really put upward pressure on the market.
I think a short-term pullback would make some sense, but the AUD is basically looking relentlessly higher. If it can pull back a little bit from here, perhaps to the 0.67 level, it could be a value play. If it drops below that, it starts to threaten the 0.6650 level, where the 50-day EMA is, and of course, that’s an area that has been attracting price a lot.
Ultimately, I think this market is going to rise, and a lot of that may have a little bit to do with the knock-on effect of commodities like gold and steel rising on the reflation trade. That’s not a good thing, but that’s the way it is at the moment.
But I think it’s a bit of a stretch. Whether it can go further remains to be seen, but I think the next few days will see a series of news deficiencies that could be considered significant enough to really drive the stock higher, at least not suddenly.
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This article originally appeared on FX Empire