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Australian Dollar vs US Dollar Weekly Technical Analysis
The Australian dollar has rallied during the course of the week to reach toward the 0.64 level, an area that’s been important more than once. If you look at the daily chart, it’s also where the 50-Day EMA is currently hanging about, so it all comes together. The resulting candlestick for the week is an inverted hammer, which could be a very negative turn of events, but if we do break above the top of it, extensively the 0.64 level, then you have the possibility of moving to the 0.65 level, and then eventually the 0.66 level where the 50-Week EMA currently resides. (The 200-Day EMA currently resides on the daily chart as well.)
If we break down below the lows of the last couple of weeks, it opens up the possibility of the move down to the 0.62 level, and then after that the potential move of the Aussie down to the 0.60 level. Keep in mind that the market is very sensitive to risk appetite, as the Australian dollar is not only a commodity currency, but it’s also a currency that banks on growth in Asia and the globe in general.
Ultimately, I do expect to see a lot of noisy trading, but you still have to assume that the downside is the best way to go. Picking up “cheap US dollars” will continue to be the way most traders are paying attention to, and therefore I think you’ve got a situation where the market is going to continue to see significantly downward momentum, and eventually something will probably break. It is not until we break above the 0.66 level that I would consider buying.
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