The Australian dollar has re-united during Monday’s trading session, breaking over a significant amount of resistance that has been in place for a few days, but it appears that we are still struggling just above. As a result, I’m not overly optimistic just yet, as there’s considerable resistance near the 0.78 handle, which might stretch a little further. Thereupon in mind, I might be very hesitant to leap in and begin buying.
At an equivalent time, it’s getting to take a particular amount of iron will to start out shorting this market as we’ve seen such a lot within the way of resiliency. After all, February and March are both falling stars, so the fact that the market is still trying to push above them shows you simply how much potential strength there is. Due to this, I might be very cautious about trying to place plenty of cash into this market; on the other hand, once we get a transparent decision, you’ll start to change your position.
Above, there is stiff opposition, owing to a minimum of 0.80 and a likely extension to 0.81 based on past market activity. Due to this, I feel we’ve tons of labour to try to do so as to form a much bigger move to the upside. It is quite worth mentioning that we’ve had such a large upward run that we may see a significant retreat, which might simply be the market looking for value. Keep in mind that this pair is clearly impacted by risk appetite.
Client sentiment on the AUD/USD is bearish, according to IG
According to IG client sentiment, retail traders on multibank have purchased this recent slump, with net longs up 6% from the day before, putting the total number of traders net-long at 54.94 percent. Even if we normally take a pessimistic view on audience mood, the fact that traders are net-long means the AUD/USD might yet fall. In addition, recent positioning adjustments have given us a strong negative contrarian inclination.
The AUD/USD declines are being stifled by a cluster of Moving Averages
A further point worth noting is that the combination has been in an upswing on several occasions, and the US dollar is unavoidable in the equation. As a result of this, the softened greenback will be under additional demand throughout this market. Once you check out the chart, you’ll make an argument for a bullish flag, but once you check out the monthly chart, you’ll see that we’ve seen a meteor recently. In other terms, we are quite definitely in a state of hesitation, but if we breakout above the 0.81 handle, this sector will be free to soar much higher, maybe as great as 0.90 in the long run.
I think the 0.76 level might be a huge price to the downside, extending right down to the 0.75 level. If we breach below that level, the sector is forecast to unravel sharply, maybe all the way to the 0.70 level. All things have been equal, though, I still favour the upside because the US dollar continues to get on its back foot.
