The Australian dollar saw some slight pullback in the early hours of Monday, but later in the day, there was a notable attempt to reach higher highs. Breaking above the key level of 0.6650 could result in a significant increase in the Aussie dollar.
However, it’s important to note that this level has been challenging to surpass in the past. Signs of exhaustion could lead to selling pressure, indicating a potential strengthening of the US dollar. On the other hand, a breakout above 0.6650 could pave the way for a move towards 0.6850.
Factors that could drive the Australian dollar higher include a surge in commodity markets, as the Aussie is considered a commodity currency. While China’s influence is significant, it may not be enough to warrant a long position on the Aussie at the moment. Support levels lie near the 0.6550 level with the 200-day EMA, followed by the 50-day EMA.
In general, the AUD/USD market appears to be attempting a breakout, although upside movement has proven challenging. Shorting the market on signs of exhaustion could be a strategy, but if the trade goes against expectations and the Aussie dollar strengthens, a long position may be considered. Monitoring the US dollar in the Forex market is crucial, as it may be time to short the greenback against other currencies.
For now, the market is being closely observed, with potential opportunities on the horizon.