The Australian dollar initially fell during the trading session on Friday, but then turned around when the jobs number came out better than anticipated. Because of this, there was more of a “risk on” attitude to the markets, and traders were looking to find a little bit of exposure to risk. This was seen not only in the currency markets, but equity markets as well. With that being the case, the markets sold off the US dollar in general, offering a bit of a reprieve when it comes to a reach towards the greenback for safety.
We are still very much below the 200-day EMA and have recently made a “lower low”, so that is something worth paying attention to as well. Furthermore, it is worth noting that the market had recently formed a big “H pattern”, which is typically a very negative sign. Between that and the 200-day EMA, it does make sense that the market continues to worry about various problems around the world. Yes, the jobs number was better than anticipated in the United States, but at the same time it should be noted that the Australians are locking things down yet again, so it is likely that all things Australian will probably struggle.
With all that being said, if we were to break out above the most recent high, then possibly we could go looking to the upside. If that is the case, then we could go towards the 0.7750 level, an area that had recently seen a lot of selling. The 0.78 level above there is important, as it is the top of the overall range.The market is going to be very noisy and choppy, so I think you need to pay attention to risk appetite in general, as the Australian dollar is a commodity currency, and something worth paying attention to as a risk appetite asset. The US dollar, on the other hand, is very reliable as a safety asset, so it is most certainly worth paying attention to because people may go looking towards the bond markets in order to protect themselves. That being said, it should be noted that we turned around quite drastically during the session on Friday.
