AUD/USD was weak for almost all of 2021, with the yearly high developing in February. The trend lower wasn’t the cleanest overall, but there were certainly periods where one-way momentum was strong. More periodic momentum is anticipated as we head into a new year.
What is seen as the big deciding factor for the general trading bias is how 7000 is handled moving forward. It’s not just a psychological level, it’s a real level that has been in play on numerous occasions since 2018. At times it has acted as both strong support and resistance.
7000 is currently viewed through the lens of support as it recently held for the first time since November 2020. The emphatic bounce off 7000 in December shows that its importance as a major level hasn’t waned with time.
While the 2021 trend remains against AUD, if the level continues to hold there is reason to at least be neutral, and that could change to a more bullish outlook with time. A meaningful break below 7000 on a weekly closing basis, however, could usher in another wave of selling during Q1.
AUD/USD Weekly Chart
Chart prepared by Paul Robinson, created with TradingView