- The AUD/USD has given up gains rather quickly during the day on Thursday as we continue to see a lot of US dollar strength.
- The Australian dollar has been a bit more resilient than many of the other major currencies out there, so therefore it should not be a big surprise that we are still above this major support level in the form of the 0.67 level.
- There is a lot of “risk off” type of trading out there, and that does work against the Australian dollar in general.
With, if we break down below the 0.67 level, it’s very likely that the Aussie will go looking to the 0.65 level. This could be a huge flush lower, as it has been important multiple times in the past. The market will continue to be very noisy in general, but I do think that we’ve got a situation where we will eventually break down through the floor. Rallies at this point continue to be selling opportunities, just as we have seen during the day. The 50-Day EMA above is at the 0.69 level and shrinking quite drastically, suggesting that we are going to see a shorter ceiling going forward. I think now, the nasty candlestick that we formed on Tuesday is something worth paying attention to because those types of moves do not happen in a vacuum.
Wait for the 0.69 Level
It’s not until we break above the 0.69 level that I would even consider a rally something worth paying attention to, because it would take a Herculean effort to make that happen. Given enough time, I do think that we will find ourselves near the 0.65 level. At that point, the decline could be rather scary if we do in fact get it. On the other hand, if we were to break above the 50-Day EMA, we could make a return to the 200-Day EMA, but the fundamentals certainly do not line up for that to be a thing anytime soon. After all, the Australian dollar is highly levered to the commodity markets, and therefore it needs a certain amount of “risk on” type of economic trading and growth to get moving to the upside.
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