Australian Dollar Reaches Above 200 Day EMA

The Australian dollar is trying to take out the 0.73 level as I write this article, and that is an area that a lot of people will be paying close attention to. It has been significant resistance previously, so it makes a lot of sense that it would be significant resistance now. With this being the case, it is very likely that the market is going to have a lot of volatility in this area. If we can close substantially above the 0.73 handle, then I think it opens up the possibility of a move towards the 0.75 handle. (This of course is with the backdrop of a random headline could cause chaos at the moment.)

AUD/USD Video 04.03.22

US dollar strength is something that we have seen a lot of over the last several weeks against other currencies, but the Australian dollar has been rather resilient, perhaps in sympathy with the New Zealand dollar and the fact that it very well is likely going to continue to strengthen due to the fact that the RBNZ has stated that more interest rate hikes are probably on the way.

The biggest problem of course is going to be that the Australian dollar is highly levered to commodities, and while commodities have been going higher, it is not in a healthy way. If we have to worry about the global economy slowing down, it will be a very serious problem for the Australian dollar as it is so highly tied to growth. In other words, we need a healthy and vibrant economy to support the Australian dollar going forward. At this point, it is a bit of a stretch to think that is going to help.

For a look at all of today’s economic events, check out our economic calendar.