- The Australian dollar fell on Thursday, as we continue to see a bit of consolidation.
The Australian dollar has fallen on Thursday as we continue to see a lot of noisy behavior in general. At this point, I look at the Aussie dollar as being stuck between the 0.69 level on the bottom and the 0.71 level on the top.
This is a market that will continue to consolidate overall, I believe, but if we were to give back the 0.69 level and break down from there, we could go looking to the 50-day EMA near the 0.6760 level. Anything below there, then we’re probably testing the 0.67 level.
Keep in mind that the Australian dollar is supported by the Reserve Bank of Australia and its likely interest rate hiking coming in the future, and of course, the fact that the Chinese manufacturing sector is starting to pick up. After all, Australia is 1 of the major exporters to China for its construction and manufacturing via raw goods, and that of course comes into play.
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All things being equal, though, I do believe that the US dollar is going to fight back against multiple currencies, I just believe that the Australian dollar will probably be stronger than a lot of its contemporaries, much like we had seen over the last couple of years with the British pound as it was less bad than many others.
All things being equal, if I was looking to short this pair, I might actually prefer to short the New Zealand dollar instead as they do tend to move in the same direction, but New Zealand has a lot less going for it than Australia does at the moment.
If we break out to the 0.71 level, it’s possible that the Aussie dollar could go looking to the 0.7250 level given enough time. I still believe we’re in a neutral area right now, but we’ll have to wait and see if this ends up being distribution or if it ends up being just a little bit of working off of the excess before we continue.
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