- The AUD/USD currency pair has gone back and forth during the trading session on Tuesday, as we now look at a market that is going very noisy moves.
- The 50-Day EMA underneath could offer a bit of support, right along with the 200-Day EMA just underneath there.
- There are a significant amount of buyers in that general vicinity that could come into the picture, so therefore it’s likely that we will see plenty of support, and action.
AUD/USD Break Down Scenario
However, if we break down below there it could be rather ugly. Breaking down below those moving averages opens up the possibility of a move down to the 0.67 level, an area that has been an important multiple times, so I think we need to take a serious look at that area and as a potential target. Anything below there could send the market much lower, perhaps opening up the possibility of a move down to the 0.64 level. The 0.64 level is where we launched from previously, and therefore it’s likely that there would be a lot of interest there.
On the other hand, if we were to break above the top of the candlestick for the trading session on Tuesday, then it opens up the possibility of a move to the 0.7150 level, an area where we had sold off from previously. The area is where we have seen a lot of selling pressure come into the picture at this point, because quite frankly it’s likely that we have plenty of “market memory” in that area, and if we can break above there then it would be a major sign that we are going to go higher. I don’t know whether or not we can, but if we do it’s likely that we would see a lot of money flowing into this market. The Australian dollar is highly sensitive to risk appetite, so you need to pay attention to how other markets around the world are doing.
The Aussie dollar is attached to the idea of commodity use, so keep in mind that if commodities continue to see a bit of a boost, that would help the Aussie. On the other hand, if we see commodities break down, then it’s likely that we could see this pair break down right along with it as Australia is one of the worlds major exporters of hard commodities.
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