AUD/USD Forecast: Aussie Slams Into 200 Day EMA

Christopher Lewis

This is a pair that I am paying close attention to over the next couple of days and will start to build up a position, only adding once we get a bit more clarity.

The Australian dollar has rallied significantly during the course of the session on Thursday to reach towards the 200 day EMA before pulling back ever so slightly. At this point, it looks like the market is going to continue to try and break above there, and as a result the pullback is not something that I would be overly concerned about with quite yet. That being said, we are hanging about at the very top of the previous consolidation area that I have marked on the chart, so whether or not we can continue to go higher might be a bit of an open ended question.

When you look at this chart, you can easily see that the market is trying to form a massive “W pattern”, and it has obviously been very noisy. That being said, if we can continue to go higher and perhaps even close above the 200 day EMA on a daily candlestick, then I think at that point we will continue to see plenty of momentum to the upside. This is a bit interesting, considering that the Australian economy is still locked down in various places, but it still continues to see the currency itself rally. Because of this, it is very likely that we will continue to focus more on commodities and the US dollar itself.

The 200 day EMA will obviously attract a lot of attention, and we are currently stuck between the 200 and the 50 day EMA, which of course will cause a lot of noise as well. For what it is worth, we have done this recently, as you can see back in September. However, we have since formed a “higher low”, so that might be the first sign of a continuation of the previous uptrend. It is going to be very noisy over the next couple of sessions, as we will have to determine where certainty which direction, we are going to be heading in. While the session on Thursday has been a good start, we still have some work to do to be fully convinced of. Nonetheless, this is a pair that I am paying close attention to over the next couple of days and will start to build up a position, only adding once we get a bit more clarity.

AUD/USD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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