Australian Dollar vs US Dollar Technical Analysis
The Australian dollar initially pierced the 200 day EMA showing signs of strength, but then turned right back around to show signs of hesitation. I think that’s going to be the main thing here, that we are going to see the Australian dollar remain range bound. That being said, earlier this week, we had gotten far too oversold, so a bounce made a certain amount of sense. When you look at this market, the 0.6450 level makes a lot of sense as support, just as the 0.6650 level above offers significant resistance.
In general, this is a market that I think will end up being very sideways, but that doesn’t mean that you can’t trade it. Keep in mind that it goes through the prism of risk appetite. After all, the Australian dollar is a commodity-based currency and is highly levered to the Asian economy, especially China. So, on a global growth scare, the Aussie gets punished.
On the other hand, if people take a little bit more risk taking out there, then they will buy the Aussie dollar. In general, this is a market that I think continues to be sideways and basically lost. I don’t see that being any different this particular session or the next couple. So, I think if you’re a short-term trader, you can go back and forth between these couple of levels. In other words, short term traders will continue to push this pair back and forth, and make it difficult for swing traders to capitalize on the moves.
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This article was originally posted on FX Empire
