All things being equal, pay attention to the US dollar overall, because I think that is a huge deal when we get moves in this market.
- The AUD/USD has initially fallen during the trading session on Thursday to show signs of hesitation, but at this point it’s very likely that we continue to see this as a market where it’s going to be about risk appetite.
- After all, the Australian dollar is highly correlated to risk appetite, mainly since it is so highly correlated to the commodities market.
- Furthermore, we must worry about Asia, which of course is far out on the respective as well.
Looking at this chart, you can see that the 200-Day EMA is sitting just below, and of course the 50-Day EMA. Ultimately, this is a market that I think sees a lot of noise, which is typical when you are hanging around between these 2 moving averages. If we break down below the bottom of the candlestick for the trading session on Thursday, then I think we could go down to the 0.67 level. The level is going to continue to be crucial because the market has seen a lot of noise there previously. If we were to break down below there, then it’s very likely that we could see the market drop down quite drastically. In that scenario, I think it becomes a huge “FOMO issue.”
Trying to Figure Out Where to go Next
Look at this chart, the 0.70 level is an area where are more likely than not going to be paying close attention to the round figure. Alternatively, if we break above there, then it’s likely that we could go to the 0.7150 level. The 0.7150 level is an area where we would see a lot of action, and therefore I think you got a situation where the trend would change if we can break above there. I think it would take a Herculean effort, so I’m not necessarily holding my breath for that.
All things being equal, pay attention to the US dollar overall, because I think that is a huge deal when we get moves in this market. It’s probably not going to be about the Aussie so much as it will be whether or not we have a lot of risk appetite that people are willing to take advantage of. As things stand right now, it looks weird chopping back and forth trying to figure out where to go next.