The Australian dollar has rallied quite significantly during the trading session on Wednesday to break above the 0.70 level yet again. That is an area that has been crucial for some time, but we have not made a fresh, new high, nor have we cleared the 0.71 level, something that would be the truth signal that the market is ready to take off to the upside. With that in mind, although the Australian dollar looks very bullish at the moment, and clearly of the US dollar is on its back foot in general, the reality is that it is difficult to break through this area because it has been important historically. If we can break above the 0.71 handle, then it is likely that this market plows much higher, perhaps all the way to the 0.80 level over the longer term.
AUD/USD Video 16.07.20
At this point, the market was to turn around a break below the 0.70 level again, it would show just how resilient the selling pressure is, but again, if we can break above the 0.71 level then I think it becomes more of a “buy-and-hold” scenario. I am a bit surprised that we slice through the 0.70 level the way we did, but at the end of the day I believe it comes down to the Federal Reserve liquefying the markets, and of course punishing the US dollar in the process. At this point though, one would have to think that if we start to freak out again, this place will be one of the first markets they get sold off.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
- USD/JPY Price Forecast – US Dollar Gets Clobbered Against Japanese Yen
- GBP/JPY Price Forecast – British Pound Testing Same Area
- Crude Oil Price Forecast – Crude Oil Markets Continue to Face Same Problems
- Natural Gas Price Prediction – Prices Rise Ahead of Inventory Report
- E-mini S&P 500 Index (ES) Futures Technical Analysis – Filling Gap Will Be Sign of Developing Weakness
- Natural Gas Price Fundamental Daily Forecast – Gains Capped by Call for Slightly More Moderate Temperatures