- The Aussie dollar has found itself to be a bit positive during the trading session as the jobs number in the United States was horrible.
- That being said, we have found trouble here at the 50-day EMA, and it looks to me a lot like a market that is going to continue to see that indicator matter.
- Pulling back from there is a bit interesting because we could see a little bit of a fear trade trying to come back into the picture.
If we break down below the low of the last two sessions, meaning Thursday and Friday, I think you have a situation where the Aussie dollar really could dump at that juncture. I would anticipate a move down to the 0.63 level followed by the 0.62 level. Do keep in mind that this is a pair that even while the US dollar was being eviscerated against multiple other currencies, it just didn’t perform as well as the others. And because of that, I think you’ve got a situation where you have to be very careful trying to get bullish of the Australian dollar.
On a Break Higher
That being said, if we break above the 50 day EMA, then I think you’ve got a scenario where traders may try to drive it to the 0.6550 level, give it enough time, possibly even the 0.66 level.
I don’t like the Australian dollar. It’s been one of my least favorite currencies for a while, despite the fact that it has gained over the last several months, but it is like trading in the bond market, it’s moving so slowly. So, if the US dollar starts to pick up a bit of a safety bid due to concerns about the overall global economy via the US, the Australian dollar is probably one of the first currencies I’ll be shorting.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.