The Australian dollar has been dancing around the 0.65 level. This is an area that has been important multiple times, and the fact that we continue to consolidate in this area does make a lot of sense, given that we are observing a lot of market memory. After all, it’s an area that had been significant resistance previously. This should continue to be important for most traders, and therefore you need to be aware of its importance.
Now it’s significant support, and of course, we have the 50 day EMA breaking down below the 200 day EMA kicking off the so-called death cross. Ultimately, I think this is a situation where we are trying to sort out whether or not this area is going to hold. But given enough time, I think a lot of this comes down to central bank action, especially the Federal Reserve. After all, the US central bank, the Federal Reserve, has been very cognizant of the fact that inflation continues to be a major issue in the United States. So therefore, the timeline of interest rate cuts has been pushed back and therefore, we’ve seen the Australian dollar suffer a bit. If we do break down below the 0.6450 level, then I think the Aussie drops towards the 0.63 level.
If we turn around and rally, that 50 day EMA and the 200 day EMA both come into the picture as resistance. If we can break above the 0.66 level, then we could go to the 0.67 level. But it is a bit like swimming upstream at the moment. In general, this is a market that will continue to be very noisy, but it also is a market that short term scalpers will probably love as it is so well defined as far as having an area that is a bit of a fulcrum point, namely the 0.65 level. This is an area that we have to pay attention to time and time again, as it is widely known as important.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.