- The Aussie dollar did pull back just a bit during the course of the trading session on Friday, only to turn around and break higher.
- The 0.6750 level is an area that I think a lot of people will be paying attention to.
- If we can break above there, then the market is likely to go look into the 0.6850 level.
We are threatening to break out of a symmetrical triangle, and that of course, makes people very bullish. The US dollar itself will be a bit of a mixed bag, but keep in mind that Australia is also sensitive to copper and gold, so we want to pay attention to what the commodities are doing.
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Pullbacks Possible
Short-term pullbacks at this point in time, more likely than not, find plenty of buyers, especially near the 0.6650 level. The 50-day EMA, of course, sits right around there as well, so that makes a certain amount of sense that we might be getting long on a pullback at that point.
The Federal Reserve is still in the news and after the ECB conference this week where Jerome Powell suggested that they are at least getting closer to cutting, there are a lot of people willing to bet against the US dollar in general. With this, the AUD/USD market is likely to continue to be noisy and at this juncture, I think you need to be cautious about your position sizing.
The markets continue to move based on Federal Reserve expectations and of course some of the longer term effects of what the Asian economy has on the Australian dollar itself. I do think that this is a very bullish sign and I do think that given enough time we could go much higher. I don’t think about selling until we get below the 200 day EMA, only then we can start to have that conversation again. However, this is a very unlikely outcome, but it is something that I am watching for.
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