The Australian dollar has gone back and forth during the trading session on Tuesday, as we are sitting at the 0.7150 area. I think eventually we go breaking higher but let us be honest here: the Australian dollar is probably a bit tired after rallying the way it has over the last couple of months. Regardless though, it is obvious that the US dollar is on its back foot against just about everything out there, so the Aussie will not be any different. With that being said, I like the idea of buying dips and I think that the 0.70 level could offer a bit of a floor in the current market environment.
AUD/USD Video 29.07.20
To the upside, I believe that the market probably finds plenty of interest if we can break above the 0.72 handle, as it would open up the door to reaching towards the 0.80 level over the longer term. That is my thesis at the moment, that the Aussie continues to benefit from the Federal Reserve’s loose monetary policy more than anything else. Gold is rallying which of course helps the Australian dollar as well but at the end of the day this is probably more about the Federal Reserve than anything else. There is also the China play, but that seems to be a bit of a mixed bag at the moment so I would not read too much into that the Chinese correlation, at least in the short term.
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This article was originally posted on FX Empire
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