Australian Dollar Has Noisy Start to the Week

The Australian dollar has rallied a bit during the course of the trading session on Monday, only to turn around sir falling again, before bouncing again after that. In other words, we are basically just hanging around and try to figure out where we go next. All things been equal, I do think that there is a lot of risk out there that should continue to favor the US dollar over the Aussie dollar, which of course is considered to be a risk appetite.

AUD/USD Video 15.02.22

Notice that the 50 day EMA sits above and is starting to slope lower, so that could be a bit of dynamic resistance in what has been a major downtrend for quite some time. The 0.70 level underneath is of course going to be a major round number that a lot of people will be paying close attention to, because it is not only such an important round number, but it is also an area where we have seen a lot of structural importance, so because of this I pay close attention to that level.

To the upside, if we can break above the shooting star from Thursday, that would obviously be a very strong sign, but I cannot imagine a scenario where we do that very easily. After all, the Aussie dollar has shown itself to be sensitive to risk appetite recently, and I think we continue to look at this as a “fade the rallies” type of situation if we see signs of exhaustion. If we break significantly below the 0.70 level, we could see a flush towards the 0.68 handle.

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