The Australian dollar fell initially on Thursday but recovered as the area below the 50-day EMA has offered a significant amount of support.
Quite frankly, the bond market in the United States has caused quite a bit of noise in the Forex markets, as initially during the trading session, the yields in America rallied, putting upward pressure on the US dollar.
That being said, since then we've seen the yields in America drop and that has relieved some of that pressure, allowing the Australian dollar to recover. Ultimately, we are sitting right around the 50-day EMA, an area that will continue to be important as it's a widely followed indicator.
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And of course, we are around the 0.7150 level, an area where a lot of people have been watching very closely. If we could go to the upside from here, the 0.7275 level is my target.
Reserve Bank of Australia and Commodity Influence
If we break down below the bottom of the candlestick for the trading session on Thursday, that could have the Australian dollar dropping down to the 0.6950 level, but I don't anticipate that happening very easily. After all, the Australian dollar has been heavily influenced by the fact that the Reserve Bank of Australia has raised rates, while many other central banks around the world are just simply holding.
Commodities, of course, will have a major influence on the Australian dollar as well, and of course, we have a lot of upward pressure on commodities at certain points. So, as we continue to see this noise coming out of the Middle East, I think that continues to keep this market somewhat choppy, but the Australian dollar itself is a little bit of an outlier as it is more bullish against the dollar than many others.
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