Australian Dollar Reaches Towards 50 Day EMA
The Australian dollar has rallied a bit during the trading session on Wednesday to reach towards the 50 day EMA again, a barrier that has been difficult to break above over the last three candlesticks. If we can, then it opens up the possibility of a move towards the 0.7280 level, where we had broken down from a couple of days ago. When you look at this chart, it does not take much imagination to see a channel, so that might very well be where we are heading.
AUD/USD Video 20.01.22
To the downside, if we break down below the 0.7160 level, it is possible that we could go looking towards the 0.71 handle, an area that has been slightly supportive in the past but quite frankly I think that is minor support and will go looking towards the 0.70 level underneath. All things been equal, this is a market that continues to see a lot of choppiness, but a lot of it comes down to the Chinese economic figures which of course are starting to show signs of life again, despite the fact that currently the Chinese economy is starting to move in the right direction.
Keep in mind that the Aussie dollar is highly sensitive to the Chinese mainland as there is so much trade between the two economies. As long as China can clean its act up, the Aussie dollar should be a beneficiary, despite the fact that interest rates in America are rising. Regardless, we are a couple of levels to look at, and therefore trade against.
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