Keep your position size reasonable, as I anticipate quite a bit of noise over the next several candlesticks.
- During Tuesday’s trading session, the AUD/USD currency pair saw a slight pullback, as volatility continued to impact the currency pair.
- The market is hovering around the 200-Day EMA, an indicator that many traders pay close attention to, which is causing choppy behavior.
- Additionally, the 0.69 level is in the same vicinity, further contributing to volatility in the market.
The question now is whether or not the Australian dollar will see support at this level, or if negativity will continue. This will largely depend on the interest-rate markets and what traders are focusing on. If they are looking at tight monetary policy in the United States, this could have a negative impact on the Australian dollar. However, if they are focusing on the China reopening situation, the Australian dollar could benefit, as it is closely linked to the Chinese economy and demand for Aussie commodities.
The global growth situation remains uncertain, but many traders are hoping that China will help pull the world through. If this is the case, then Australia could be one of the biggest beneficiaries. However, if the market were to break down below the hammer from the Friday session, it could lead to further selling pressure on the Australian dollar, potentially sending it towards the 0.67 level.
Overall, choppy behavior is expected in the Australian dollar market, but it is worth noting that there has been a significant selloff from the 0.7150 level that has yet to be challenged. As such, it remains to be seen whether the market will be able to find support at its current level, or if it will continue to see negativity in the coming days and weeks.
Traders should keep a close eye on the interest-rate markets, as well as the China reopening situation, as these could have a significant impact on the Australian dollar. Additionally, they should be prepared for continued volatility and choppy behavior, as the market is currently in a precarious position. Because of this I believe that the most important thing you can do is keep your position size reasonable, as I anticipate quite a bit of noise over the next several candlesticks. That being said, we should have an answer relatively quickly, as it looks like the entire market is trying to ask the same questions of the US dollar globally.
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