- The Aussie dollar has fallen pretty significantly during the early hours on Monday as we are approaching the 50 day EMA.
- Keep in mind, this is a market that I think continues to see a lot of volatility.
- It does make a certain amount of sense that there are questions asked as the last couple of days have been brutal, so why wouldn't there be any follow through at this point?
That being said, I think there's significant support near the 0.67 level, so although I do think we go lower from here, I'm not necessarily looking to short this market. In fact, I think you have the opportunity to buy it down there. Having said that, if we do break down below the 0.67 level, and I see the US dollar strengthen everywhere else, then maybe then you'll see the Aussie fall quite a bit.
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A Tough Pullback
This has been a brutal pullback, but if you look at it, we shot straight up in the air to get here as well. So really all this does is show us just how much volatility there is around the world in all the various assets. If we turn around and show signs of life, the market could go looking to the 0.69 level above, which is where we have seen a major resistance barrier.
When you do zoom out on this chart, you can see that we broke slightly above that 0.69 level showing real strength. Now the question is, are we pulling back to find momentum, or did we perhaps reach the top of the two-year range? We'll have to wait and see, but right now I think the real questions will be answered closer to the 0.67 level, and therefore I'll be watching closely as to whether or not we have more risk appetite or sentiment in order to drive the Australian dollar higher against the safety currency known as the US dollar.
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