The Australian dollar has rallied quite stringently during the trading session on Wednesday as we continue to see the US dollar get hammered. Ultimately, this is a trade that is following a strong trend and therefore there is no read too try to get short of this pair. At this point, if we pull back it should be looking at it as a potential value opportunity. With that being the case, I like the idea of adding to a position as we go long because I believe that the trend has changed for the long term. Ultimately, this is a market that I think that will eventually go looking towards a much bigger move, perhaps as high as the 0.80 level over the longer term.
AUD/USD Video 06.08.20
To the downside, the market has plenty of support at the 0.71 handle, extending down to the 0.70 level. In other words, I see that we have broken through a major resistance barrier and it should now act as a major support barrier. I have no interest in shorting this market and I do believe that ultimately this pair will find plenty of buyers every time it pulls back as the Australian dollar is not the US dollar, and it is also used as a proxy for the gold market which is basically on fire at the moment.
As long as that is going to be the case, it is likely that the pair will not slow down anytime soon and therefore should continue to go much higher over the longer term. If we were to break down below the 0.70 level, it could cause a little bit of a pause longer-term, but even then, I would be cautious about shortening.
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This article was originally posted on FX Empire
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