- The Australian dollar has fallen rather significantly during the trading session on Thursday as we have seen the US dollar pickup strength overall.
- After all, the world is still a very dangerous place, and traders are starting to question whether or not the situation in the Middle East is going to get worse.
- While that isn’t necessarily directly influence the Australian economy wore Australia itself, but most certainly influences the US dollar, which of course is considered to be one of the premier “safety currencies” in the world.
Technical Analysis
The technical analysis for this market is interesting and in a state of flux at the moment, because as I do this analysis, we are trying to break down through the bottom of a channel. The channel of course is something that has been reliable for a few months now, and the fact that we are breaking through and of course is a very negative sign. However, we also have the 50 Day EMA sitting just below current pricing to offer support, and then you also have the 200 Day EMA in that neighborhood as well. That of course will do the same thing in general, so keep in mind this fact.
However, if we were to break down below that level then I think the Australian dollar more likely than not will grind lower to reach the 0.6350 level. Anything below that level could really send the Australian dollar plunging. Regardless, this is a market that I think will continue to be very noisy, as we have seen a lot of back and forth for the last couple of months. Alternatively, if we break back to the upside, the 0.6550 level remains a massive ceiling in this market, and until we can clear that area, there will continue to be the threat of US dollar strength from time to time.
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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.
