- The AUD/USD exchange rate has pulled back a bit during the trading session on Tuesday, as we have reached the top of a significant channel.
- A little bit of a pullback does make a certain amount of sense, with the 200-Day EMA being a possible target.
- Breaking down below that level could open up the possibility of a move to the downside, perhaps down to the 50-Day EMA and the bottom of the channel.
Possible Move Up to the 0.70 Level
This channel has been rather reliable, so this does suggest that perhaps we could get a little bit of a pullback. I don’t necessarily think that there’s any real reason to get overly aggressive, but we should keep in mind that this market will more likely than not pullback. That pullback could offer a bit of a buying opportunity, but we need to get through the Thursday Consumer Price Index reported to have any type of clarity as far as a longer-term move.
That being said, it is possible that we break above the top of the shooting star from the Monday session, opening up the possibility of a move to the 0.70 level. The 0.70 level is a large, round, psychologically significant figure, and an area where I would anticipate seeing a bit of noise. That being said, the market should continue to see a lot of interest in that area, and therefore a big fight. In other words, it does make quite a bit of sense that we pullback, but I don’t necessarily think that it’s a tradable event. This is more of a grind to the upside, and it certainly looks as if we are going to do everything, we can to get to the 0.70 level, an area that has been noisy.
Because of this, I think we get an opportunity to pick up a little bit of value, but if we were to break down below the bottom of the channel, the absolute bottom of the Aussie will fall apart. That would also be a situation where we would see a lot of US dollar strength across the board, but I don’t think we get that move until we get CPI numbers that are extraordinarily strong, something that the market does not want to see in general. Ultimately, I think this is a situation where we are on the precipice of a bigger move.
Ready to trade our daily Forex forecast? Here’s a list of some of the best forex trading platform for beginners in Australia to check out.