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Christopher Lewis
AUD/USD

The Australian dollar has rallied a bit during the trading session on Wednesday, but as you can see on the chart, the market continues to struggle right around the 0.6450 region. Above there, the market extends all the way to the 0.6550 level, so with that in mind I like the idea of fading this market on rallies, with the understanding that eventually we could break down below the 50 day EMA and reverse the huge move that we had seen straight up in the air. When you look at the chart, you can see that momentum has certainly struggled as of late, so it makes sense that eventually we do get the breakdown as the Aussie has essentially forgotten about gravity.

AUD/USD Video 07.05.20

What is more interesting is that we had a shooting star for the trading session on Tuesday, but it was also preceded by a hammer on Monday. Because of this, it shows that we are in fact trying to determine the next move, and simply breaking out of the range of those two candlesticks could be reason enough to get involved for a larger move. The Australian dollar has seen quite a bit of choppiness as of late, and I think that is also a sign that we are starting to run out of steam to the upside. If we break down below the 50 day EMA, I will anticipate that this market probably goes looking towards the 0.65 zero level, and then possibly even the 0.62 level rather quickly. Whether or not it continues a longer-term trend might be a different question, but clearly, we have a lot of downward pressure above.

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