The Aussie dollar was negative during the Friday session, as the market is trying to price in the idea of the RBA hiking rates soon, while the Fed is expected to cut twice this year.
AUD/USD
The Aussie dollar has fallen a bit during the trading session here on Friday as we continue to see a little bit of volatility. Quite frankly we have seen the market really take off to the upside and now it looks like a little bit of sideways action is likely in order to work off some of this froth.
The 0.69 level is an area that I think you need to pay close attention to as it is previous support and resistance going back several years. We had broken out above the 0.6750 level to get this thing moving, but now that we have stretched the way we have, I think it makes a little bit of sense to either grind sideways or pull back.
Monetary Policy and Global Trade Catalysts
Keep in mind that the Reserve Bank of Australia is likely to raise rates and that is one of the big movers of the markets at the moment. The Federal Reserve is expected to cut 1, maybe 2 this year, so that does put pressure on the dollar in favor of the Aussie dollar.
Beyond that we also have Chinese manufacturing numbers coming out better than anticipated and that continues to help the idea of the Aussie economy strengthening as it is a major exporter to China for raw materials.
Top Regulated Brokers
The market will move on a risk appetite perspective as well, so if risk appetite starts to pick up, that would be reason enough for the Aussie dollar to continue higher as well. I have no interest in shorting this pair, and if I want to start buying the US dollar, I will do it against other currencies.
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