The Aussie bounced off the 50-day EMA in what can mostly be described as a continuation of the sideways movement to give signs of life again. Ultimately, the market looks like it is trying to create enough momentum to finally break above the 0.78 level, an area that was like a brick wall to this market. Once we broke higher and then crashed from 0.80. The 0.80 level is a huge level on the charts when it comes to the monthly timeframe, and if we manage to break above it and clear the 0.81 handle, it could open a move all the way to 0.90.
AUD / USD Video 05/04/21
This will likely be based on the commodity supercycle that people claim is happening right now, and it will certainly make a lot of sense. However, the price simply cannot break above the 0.78 level right now, and this is what you need to pay attention to. In the end, it doesn’t matter if you are “right in your analysis” if you are wrong. With that said, a break above the 0.78 level forces me to buy and then look towards the 0.80 level. On the other hand, if we reverse to the break below the 0.75 level, I will become very bearish on that pair for several months. Remember that the commodity markets will have their say, but gold is not helping the situation, so this may be part of what is happening here.