(MENAFN- Daily Forex) The aud/usd has broken above the 0.70 level, showing signs of strength yet again. That being said, we are in an area that has been resistant previously, and therefore I think it does make a certain amount of sense that we would struggle to continue to go higher. If we were to break above the 0.71 level, then it opens up a move to the 0.72 level, essentially breaking above the top of the shooting star from last week.
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Breaking above that is also a very bullish sign, as it would be an explosion through resistance, and one would have to think there would be a lot of short covering in that region. That would show a resilience in the Aussie that one would have to pay close attention to, and therefore one would assume that there should be a lot of momentum in this market.We are Going to Make a Big Move Soon
On the other hand, if we break back below the 0.70 level, we have a couple of different scenarios that could be playing out. The first one would be the market simply going back and forth, as we were hanging around in this area for the last couple of weeks, and it's very likely that we could see that happen as it could give us an idea as to when we can go short or long. That being said, if we were to break down below the 200-Day ema , it's likely that the market goes down to the 0.67 level. The 0.67 level is an area that has been important for a while, so if we were to break through that, that would almost certainly open up a flush of new short-selling.
The Australian dollar is highly levered to the Chinese economy and of course the overall global economy as it is highly attached to the commodity markets. That typically means that the market will continue to see a lot of momentum based on whether or not people believe that the markets are getting ready to see a lot of demand from consumers around the world. Whether or not that's true remains to be seen, and we are most clearly at an area that should have quite a bit of interest, and it is a major inflection point. Because of this, I think we have a situation where we are going to make a big move soon, and it should be obvious when it happens.
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