AUD/USD
The Australian dollar has rallied a bit in the early part of the trading session on Monday as word has gotten out that the Americans and the Iranians are extending the ceasefire, perhaps trying to work forward to a peace agreement. This is the market trying to get ahead of that, but you have to ask questions about whether or not we can continue to see any significant amount of follow-through on that because we're already starting to hear bits and pieces from Iran that sound like something the Americans wouldn't agree to.
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So, unfortunately, we have to believe this is a market that could be a bit vulnerable in as much as the US dollar should end up being a major factor here. Watch the 10-year yield. If the yield in the United States starts to pick up again, that will end up being a bit of a boost for the US dollar, sending this pair lower. That also has to be taken into account, right along with the idea of commodities. What are commodities doing? Australia obviously is heavily enriched by a huge commodity sector. Australia is inevitably attached to Asia, though, so there may be some fuel disruptions in Asia that directly influence Australia. In other words, there's going to be a lot of noise here.
Technical Support and Resistance Levels
From a technical analysis standpoint, the 50-day EMA just above the 0.71 level could be a bit of resistance. If we can break above there, then the 0.7150 level would be the next target.
Short-term pullbacks, I think, offer buying opportunities as long as we can stay above the 0.6950 level, but I also recognize this pair is going to remain choppy. Despite the fact that there was good news over the weekend, it really hasn't changed much.
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