- The Australian dollar rallied a bit in the early hours of Tuesday, breaking above the previous rectangle to show signs of continuation to the upside. However, the market has been very noisy, and the Australian dollar has been a bit strange to say the least, as it hasn’t gained on the US dollar as strongly as many others had recently.
- This market has been one that has been a bit lackluster, even when the US dollar was being crushed by the Euro, Pound, etc.
Technical Analysis
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The market has been in a rectangle between the 0.64 level at the bottom, and the 0.66 at the top. The market has been stronger over the last few days, as we bounced back from the 50 Day EMA, and the crucial, and often visited, 0.6550 level. The market seems as if it is trying to build up momentum going forward, and the size of the candlestick, and therefore people will be expecting to follow through. The market will continue to see risk appetite as a major driver of the markets. The recent behavior of this pair suggests that people are starting to perhaps think that the global economy is going to continue to perform, despite the concerns about tariffs.
The market on pullbacks should be a potential buying opportunity, at least until we break below the 200 Day EMA, presently at the 0.6488 level. Anything below there could have the sellers jumping into the market and getting short. A move below the 0.64 level opens the door to much further selling. If that were to happen, we could be looking at a move all the way down to the 0.60 level, which would of course attract a lot of headline attention. This could cause some noise, but at the end of the day, this is a market that will probably follow the overall trajectory of the US dollar in the greater Forex markets.
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