The Australian dollar has rallied rather significantly on Monday, showing signs of life yet again as the US dollar continues to get hammered against almost everything. Ultimately, I do believe that the US dollar is going to continue to weekend, and if that is going to be the case in the Aussie dollar is going to rally by default. Furthermore, there are signs that perhaps the Chinese economy is starting to pick back up, and of course the Australian dollar is a bit of a proxy for that economy. With that, we also get more upward momentum. Finally, let us not forget that gold has been taking off in a straight line to the upside, which also works in favor of the Australian dollar.
AUD/USD Video 28.07.20
With all that being said, I think that the 0.70 level now offers a significant amount of support, and that traders will continue to look to it for a bit of a “floor.” The Aussie has been extraordinarily resilient for some time, so to get some type of buying pressure in that area would hardly be much of a surprise. Furthermore, I believe that we have seen a major trend change, and now the Australian dollar is very likely to go looking towards the 0.80 level over the longer term.
This does not mean we get there overnight, but I like the idea of buying dips as they occur, as it has continued to show itself to be the best way going forward. Ultimately, the 50 day EMA underneath also offers a floor so quite frankly there is just no argument to be made for selling.
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:
- Silver Price Daily Forecast – Silver Rises To Multi-Year Highs
- GBP/USD Price Forecast – British Pound Continues to Grind to the Upside
- USD/JPY Price Forecast – US Dollar Tanks Against Japanese Yen
- Natural Gas Price Prediction – Prices Slide as Hanna Fades
- Oil Loses Ground Despite Major Weakness Of The U.S. Dollar
- AUD/USD Price Forecast – Australian Dollar Kicks off the Week With Gains