Australian Dollar Recovers as Risk Appetite Returns

The Australian dollar has rallied significantly during the trading session on Friday as risk appetite continues to be a fluid situation. During the day on Friday, we have seen a return to it, so it should not be a huge surprise to think that the Aussie dollar has rallied right along with it. That being said, the 200 day EMA sits just above the 0.73 handle, an area that has been tested multiple times and has held quite well for most of it.

AUD/USD Video 28.02.22

Keep in mind that the US dollar of course is a safety currency, and the more concerns that we have around the world, the more likely the US dollar is going to be bought. Furthermore, you need to keep in mind that the market is still very much in a downtrend, despite the fact that we continue to fight. Underneath, we have the 0.70 level as a potential target and most certainly a support level. If we were to breach that level, then we will more than likely drop a couple of hundred pips rather quickly, as the 0.68 level would be an area that traders will be paying close attention to. Anything underneath there will collapse the Aussie.

If we do break above the 200 day EMA, that could kick off a move towards the 0.75 handle, and as a result it would probably be a big “risk on move” around the world. Keep in mind that the Federal Reserve is still expected to tighten rather aggressively, so that should continue to help the US dollar in the short term.

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