Australian Dollar Fails at 200 Day EMA

The Australian dollar has rallied a bit during the trading session on Tuesday to go looking towards the 200 day EMA but has failed to break above there. By doing so, it shows that we still have a lot of technical resistance just above, especially considering that the 0.73 level is in the same vicinity. The 0.73 level has been resistant more than once, so it should not be a huge surprise to see it causing a bit of a problem now as well.

AUD/USD Video 02.03.22

Keep in mind that the US dollar of course has a bit of a safety bid attached to it, meaning that we will almost certainly see a lot of volatility go racing towards it on geopolitical concerns occasionally. This is especially true considering just how much there is going on around the world. That being said, it must be noted that the Australian dollar is anticipated to be a beneficiary of New Zealand dollar strength and interest-rate outlook. The two currencies do tend to move in the same direction regardless, so you have to keep an eye on that.

If we do break above the 0.73 level, then it could open up a move all the way to the 0.75 level conceivably. I anticipate this might have something to do with more of a “risk-on” type of move around the world, which seems like a bit of a stretch but if we got the right headlines coming out of Ukraine, that might actually happen rather quickly. As far as this currency pair is concerned, there is also the specter of the Federal Reserve looking to raise interest rates, but Wall Street is now starting to price in that they will be able to raise anywhere near as aggressively as once thought.

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