The Australian dollar has initially rallied during the course of the week but then gave back gains. The 0.7250 level above has offered resistance, but then we sold off to form a less than attractive candlestick. After all, the market has ended up forming a bit of a shooting star, just as we did during the previous week. That being said, the Australian dollar has been grinding lower over the longer term, so at this point in time it looks as if we are bouncing a bit, then selling off, only to repeat the entire circumstance.
AUD/USD Video 24.01.22
The Australian dollar of course is highly sensitive to risk appetite, so it is worth paying attention to what is going on around the world, and I do think that eventually we have a situation where we have to make up our mind longer term. If we break down below the 0.7150 level, is very likely that the Aussie dollar will go looking towards the 0.70 level. That is an area where we have seen support previously, and therefore I think it makes a nice target. If we break down below there, look out below because the market will more than likely drop a couple of handles rather quickly.
On the other hand, if we can break above the top of the shooting star from the previous week, then it is very likely to go looking towards the $0.75, an area that has been important more than once. If we break above there, then we could recapture some type of bullish market, but right now that does not look very likely.
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This article was originally posted on FX Empire