The Australian dollar has initially tried to rally during the trading session on Monday but then gave back the gains to drift a little bit lower. At this point, the market looks as if it is going to try to drift towards the 0.71 handle, an area that I think has a lot of support extending down to the 0.70 level underneath there. In other words, it is a “zone of support” that has been important from both a support and resistance standpoint multiple times throughout history. Beyond that, we also have the 50 day EMA approaching the 0.70 level, so at this point it is only a matter of time before there will be plenty of buyers entering this market barring some type of major change.
AUD/USD Video 11.08.20
The Australian dollar is getting quite a bit of a live due to the fact that the Federal Reserve continues to print greenbacks, and of course with the Federal Reserve loosening its monetary policy it does make sense that the US dollar loosens its grip on other currencies quite a bit. The Aussie dollar is still relatively cheap in relation to the last 20 years or so, and this could lead to a little bit of value hunting. Yes, I realize that the market is a bit parabolic so it is not overly surprising that we have to chop around up here but the ship has been brutal, and that does suggest to me that we more than likely will see a continuation of the uptrend. Longer-term, we could see this market go as high as 0.80 before it is all said and done.
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This article was originally posted on FX Empire
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