- The Aussie dollar rallied significantly during the early hours on Thursday, and it looks like we are going to continue to see a lot of volatility.
- Keep in mind that the Australian dollar is trying to pressure to the upside, which is a significant, recovery and this market now is dealing with the 50 day EMA.
The Area of Consolidation Again
And I think the 50 day EMA could come into the picture to offer some selling pressure. If that's going to be the case, then we are probably living on somewhat borrowed time. That being said, if we can break above the 200 day EMA, then it opens up a move to the 0.6650 level. The Australian dollar has been very bullish over the last couple of days, but at this point we are just essentially heading back into the previous consolidation area and in fact, we're not even to the middle of it yet. So, I think this is just a continuation of more sloppy trading as we continue to see that around the world. Keep in mind, there are a lot of geopolitical concerns and that will eventually favor the US dollar. But maybe the US dollar just got ahead of its skis a bit.
If that's the case, then this is a simple rally that you can sell on signs of exhaustion. We don't really have that either, so I'm somewhat in a holding or neutral pattern at the moment. Underneath the 0.64 or 5 zero level is an area that you will have to pay close attention to, because if we reach that area, it could be support.
But if the AUD/USD pair breaks down below it, it opens up a move down to the 0.63 level. On the upside, we have the 0.6650 level, which has been major resistance and breaking above that, which I don't think we do in the next day or two, to say the least, could open up a move to the 0.6850 level.
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