The Australian dollar initially pulled back just a bit during the trading session on Tuesday before shooting straight up in the air. We are threatening the previous high, near the 0.7440 level. This is an area that the market has previously seen as important, so now that we are peaking above it, it does suggest that we are going to go looking towards the 0.75 handle given enough time. That does not mean that it will be easy, just that the market is likely to get there eventually.
AUD/USD Video 23.03.22
Looking at the size of the candlestick, it is rather impressive when compared to the previous candlestick, showing that we are starting to pick up momentum again. That being said, the 0.75 level is going to be difficult, and therefore I think we probably have to spend some time building up momentum. If and when we can finally break above there, the market could become more of a “buy-and-hold” scenario, but until then I think it is probably a scenario where you have to be somewhat cautious.
Underneath, the 0.7375 level now should act as a minor support barrier, something that would be worth paying close attention to. Market participants will continue to pay close attention to hard commodities such as gold and copper to see whether or not the demand for the Australian dollar continues to pick up.
Keep in mind that there is a certain amount of a “risk premium” when it comes to this market, so if we get a sudden “risk-off” attitude out there, it could have people running towards the US dollar again. At this point though, it certainly looks as if we are trying to go higher.
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This article was originally posted on FX Empire