The Australian dollar has bounced significantly during the trading session on Monday, as the 0.70 level has offered support. This is a large, round, psychologically significant figure, so it does make quite a bit of sense that we would see buyers involved in this area. At this point in time, the market should see plenty of resistance near the 0.7150 level, which is an area that we had seen a lot of selling pressure at. Ultimately, I do think that this is a market that will eventually see selling pressure, but it may not be in the short term.
AUD/USD Video 07.12.21
When you look at the Australian dollar, it is pretty easy to see that it had been oversold, and bouncing from a large, round, psychologically significant figure is exactly what you would anticipate. That being said, it does not necessarily mean that the Australian dollar is suddenly going to change the trend. I think most big money traders will probably be waiting to see how this behaves over the next couple of days, and I would not be surprised at all to see them jump all over the see if it shows any sign of weakness.
The 50 day EMA is currently sitting at the 0.73 handle, an area that is relatively unimportant, but at this point in time seems like it is a light years away anyway. The market will continue to be very noisy, but I think that the smart play is to simply wait for an opportunity to buy US dollars “on the cheap.” We certainly do not have that opportunity right now.
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This article was originally posted on FX Empire