- The Australian dollar is still very volatile as markets attempt to level off overall and determine whether or not there is a general "risk on" or "risk off" mentality.
- Remember that the Australian is extremely perceptive. It's also critical to remember that Asia has an influence on Australian dollar pricing.
AUD/USD Continues to Hang About 0.66
As you can see, we have been circling the 0.66 level, which has historically shown resistance. Given that we have been there multiple times and that there has been some sort of reaction each time, it seems reasonable that we will continue to view this as a bit of a price fulcrum. This has been the way for some time now, so keep this in mind.
The 200-day EMA, which may enter the picture, is below. If we rally from here, the offer serves as support. The shooting star that formed on Friday acts as resistance all the way up to the 0.6675 level. I believe that at this point, we are still waiting to see what the CPI figures will be and whether or not they indicate that inflation is occurring in the US.
We would be moving in the middle of the consolidation range, so a short-term pullback makes some sense. The 0.65 level underneath is a place that, in my opinion, provides a good deal of support. Generally speaking, I believe that we need to view this as a situation where we are likely to be more supported than resisted, but that the CPI never has the ability to change things very quickly. If we do see a breakout to the upside, we may be able to reach the 0.69 level.
We'll see how that turns out, but bear in mind that the Australian dollar needs more of a risk-taking appetite globally. You also need to be aware of what's going on in Asia and the overall performance of commodities. A move down to 0.6450 would be possible if we were to break the 0.65 mark. Right now, the Federal Reserve's decision to lower interest rates later this year is the story that people are focusing on the most. Thus, it appears that people are at least willing to support this currency at this point.
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