The Australian dollar is continuing to be very strong, although it's more or less a bit of a grind.
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AUD/USD
The Aussie dollar has gapped a little bit lower during the open here on Monday but then shot straight up in the air.
All things being equal, the Australian dollar is continuing to be very strong, although it's more or less a bit of a grind. Short-term pullbacks, I do think, are buying opportunities and I also recognize that the 0.7150 level is a little bit of a floor.
The 50-day EMA is sitting just below the 0.71 level. The 0.71 level is an area that a lot of people will be watching very closely. All things being equal, little bits of pullback here and there, I think, offer value that a lot of traders will be willing to take advantage of. “Buying the dips” is the mantra of most traders from what I can see.
Market Factors and Resistance
US rates continue to climb and of course commodities have a major influence on what happens next, so pay attention to that as well. This market continues to see rates rising, but at the same time, the Australian dollar is highly sensitive to commodities, which are also very strong at this point in time.
But the upside, I think, is somewhat capped in the short term. The 0.73 level is an area that I think a lot of people will be watching as resistance, but if we can break above there, it does open up the possibility of going to the 0.75 level.
I think all things being equal, unless we get something really ugly as far as risk appetite destruction, we do continue to see the Australian dollar favored as the Reserve Bank of Australia has been tighter than most other central banks and of course have even raised rates.