The Australian dollar tried to rally initially during the week but gave back gains as soon as we got close to the 0.70 level. This should not be a huge surprise; this is an area that has been important more than once. Quite frankly, this is a market that looks like it is going to continue to see trouble in that area, as it is a large, round, psychologically significant figure and of course it is an area where the market has seen a lot of resistance previously as well as the sign of a major breakdown.
With all of that in mind I think that the market is more than likely going to roll over every time it tries to rally, at least in the short term. With all of that being said, I think that if we do break down it is likely that we go looking towards the 0.6675 level. That is an area that had been both support and resistance in the past so it makes sense that we would be attracted to it. Furthermore, the 50 week EMA is sitting right there and curling higher so one would have to think that there is probably some buyers down there.
AUD/USD Video 29.06.20
To the upside, if we can clear the area between the 0.70 and the 0.71 level, then it is likely that we take off for a bigger move. It is worth noting that the 200 week EMA is sitting just above there as well, and by the time we get there we could have a big fight from a technical analysis perspective. A move above that level as a longer-term “buy-and-hold” signal.
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This article was originally posted on FX Empire
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