The AUDUSD has had a heck of a run since early November.
Even after today’s pullback, the pair is up a considerable 520 pips.
And if we measure from the March low, the Australian dollar has gained just over 2,000 pips against the USD.
We last reviewed the AUDUSD when it was breaking above the 0.7400 area on December 11th.
And if you’ve followed me for a while, you know that I’ve liked AUDUSD higher since the pair’s early November breakout.
But no uptrend is complete without pullbacks.
They’re a natural and healthy occurrence in any uptrend.
However, retracements like today’s are also where most traders go astray.
Many retail traders see today’s price action on the AUDUSD and immediately start looking for ways to short the pair.
Those traders are swimming against the current.
As you can see from the weekly time frame above, the AUDUSD uptrend is alive and well.
So, why would a trader try to short such a bullish market?
It probably has a lot to do with the fact that most retail traders that I hear from are stuck on the lower time frames.
The 5-minute chart makes any pullback look like the start of a downtrend.
Looking at the daily and weekly AUDUSD chart, it’s clear that buyers remain in control.
Of course, if the pair were to take out 0.7400 on a daily closing basis, that would start to alter my bias.
For now, though, looking for buying opportunities from AUDUSD remains the path of least resistance.
Key support and resistance for AUDUSD are 0.7400 and 0.7750 respectively (see chart above).
Immediate support for the pair is near 0.7500 with 0.7640 providing local resistance.
I continue to like AUDUSD higher to 0.8100 in 2021.