- The Australian dollar has initially rallied during the trading session on Friday, as the risk appetite increased a bit.
- It makes sense, as the Australian dollar is a commodity currency, and at the same time the Swiss franc is considered to be a safety currency.
- At this juncture, the market is likely to continue to see a lot of volatility, as we are still wondering what’s going to happen with trade tariffs coming out the United States and other countries, and of course whether or not the economy is going to due to these movements.
Risk Appetite
This is a market that could continue to be driven by risk appetite more than anything else, so you need to pay close attention to not only this market, but other markets as well. For example, stock markets could give us a bit of a “heads up” as to where we are going in this pair as it obviously will rise with risk appetite rising as well. On the other hand, if we start to see everything sell off, then it generally favors the Swiss franc as a safety move.
Technical analysis suggests that we will probably be very choppy in this area, which makes a certain amount of sense as the 0.57 level is an area of importance, and of course we are currently between the 50 Day EMA below, and the 200 Day EMA above. This is an area on the chart that a lot of traders start getting involved in, so it does make a certain amount of sense that there is a bit of confusion and uncertainty at this juncture. Because of this, I think you need to be very cautious about putting a lot of money into this market, but once we break out of these 2 moving averages, then we could get a bit more clarity.
Ready to trade our daily Forex analysis? Here’s a list of the best licenced forex brokers in Australia to choose from