Australian Dollar Gets Hammered
The Australian dollar has gotten hammered during the trading session on Friday as traders continue to concern themselves with risk appetite in general, with the Federal Reserve tightening monetary policy. It appears that the trading world has finally come to grips with the fact that things are going to be much tighter than they once were, and therefore it will work against the possibility of growth. However, as we are looking at the 50 day EMA offering a little bit of short-term support, then we may get a little bit of volatility. We have been in a big move to the upside but at this point in time it certainly looks as if we are going to struggle. If we break down below the 50 day EMA, it could be a very negative sign indeed.
AUD/USD Video 17.01.22
Ultimately, I think there is plenty of support near the 0.7150 level, as it is an area where we have seen a bit of a bounce. On the other hand, if we turn around and take out the top of the shooting star from the Thursday session, that would be an extraordinarily bullish sign. Regardless, the Aussie dollar is going to be thrown around by commodities and what is going on there. Ultimately, this looks like a market that is probably going to continue to see a lot of noisy behavior. Because of this, I would be very cautious about putting too much money to work in one shot, because quite frankly this is a market that will be very noisy over the next several sessions as we try to get our feet underneath us.
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