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Australian Dollar vs US Dollar Technical Analysis
The Australian dollar has initially tried to rally during the course of the trading session on Friday, only to see signs of weakness yet again. All things being equal, this is a situation where the 0.64 level continues to be a bit of a magnet for price, and I do think that it is likely that we continue to see more negativity in this market, and I just don’t have a situation where I am willing to buy the Australian dollar in such a “risk off environment.”
Ultimately, this is a situation where I think that the Aussie has been consolidating, but it is also very negative overall. If we were to break down below the lows of the last couple of weeks, then it’s likely that the market could go down to the 0.6250 level. On the other hand, if we were to break above the 0.65 level, then it makes quite a bit of sense that we see the market continue to see a lot of negativity in that area.
That being said, the market is likely to continue to look at the double top that we form near the 0.6520 level, and if we were to break above there, then the market could really take off to the 0.66 level. Alternatively, we also have the 50-Day EMA near the doubletalk, therefore it’s likely that the market will continue to see a lot of trouble as well.
The Australian dollar is highly sensitive to the risk appetite around the world, and therefore I think you’ve got a scenario where we commodity markets, and of course global growth will come into the picture. Quite frankly, with so many major economies out there looking like they are heading toward a recession, I think the Australian dollar will continue to struggle. Granted, the Chinese data has been slightly better as of late, but it is dubious at best most of the time. Remember, the Aussie not only runs on global growth, but more specifically Asian growth most of the time as they are a supplier of the raw materials for that region of the world.
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