The Australian dollar has gone back and forth during the trading session on Wednesday as the 0.79 level continues to cause bits of trouble over the last couple of sessions. That being said, the real prize is the 0.80 level, an area that has been important multiple times on the monthly chart. Quite frankly, the 0.80 level will tell us everything about the Australian dollar for the next couple of years. If we can break above there and significantly so, then it will rush in a major move towards the 0.90 level.
AUD/USD Video 25.02.21
However, if the 0.80 level above cannot be broken, we could very well see this market crumble again. That being the case, it would have a lot to do with the interest rates in America spiking, and perhaps some type of fear entering the markets in general. This would probably have something to do with the idea of the economy slowing down around the world, which let us be honest here: it very well could happen. Another thing to pay attention to is the fact that we have gotten a bit overheated, so a pullback would make sense in the short term, but if we were to break down below the 0.75 handle, that would signal something much more significant in this market.
If that happens, it probably would be seeing in multiple markets around the world, not just this one as it is a proxy for commodities and of course the overall risk appetite of traders. I believe that the next several weeks are going to be very noisy between here and the 0.80 level.
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This article was originally posted on FX Empire