- The AUD/USD has fallen right away during the trading session on Monday but has fought back quite valiantly to show signs of life.
- The market is trying to take back the 0.69 level, and that of course is a very bullish sign.
- Nonetheless, we are still in a market that has been grinding sideways with a little bit more negativity than positivity, so I don’t necessarily think that this is a signal that we should start buying Aussie right away.
The Australian dollar has a long history of being tied to commodities, and with the Federal Reserve seemingly not worried about causing a recession, the idea of the Aussie strengthening is a bit of a stretch. A lot of this will come down to being cautious with your position size because it is obvious to me that we have a lot of noisy behavior in this general vicinity. Because of this, the market is likely to continue to be difficult, to say the least.
US Dollar Expected to Strengthen
There are a lot of negative influences out there right now, so it does make a lot of sense that the US dollar should strengthen in general. That’s probably how I’m going to approach this overall, as I would prefer to own the US dollar, and therefore I am looking too short either a break down below the bottom of the candlestick for the day, or signs of exhaustion after a short-term rally. The 50 Day EMA sits near the top of the Thursday and Friday candlesticks. This could be an area of resistance, so I would pay close attention to how the Aussie behaves there. Furthermore, the 0.70 level has also shown itself to be rather resistant, which sits just above there.
If we can break above the 0.70 level, then it’s possible that we make it look into the 200 Day EMA. That currently resides near the 0.71 level, and therefore it’s likely that the market will pay close attention to that area if we were to get back to that level. Keep in mind that we sold off from that area previously, so there should be a significant amount of “market memory” in that general vicinity. It is not until we clear all of that resistance that I would consider the trend changed at this point.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex brokers to check out.