Australian Dollar Sits on Top of 200 Day EMA

The Australian dollar has pulled back during the course of the trading session on Friday to reach down towards the 200 Day EMA. This of course is an indicator that a lot of people pay attention to, so be interesting to see whether or not we will have an opportunity to find the market stable enough to rally again. That being said, this is an area that I think will continue to attract a lot of attention in both directions, so you obviously have to be very cautious with putting too much money into the market right away.

AUD/USD Video 14.03.22

Despite the fact that the US dollar has strengthened in general, the Australian dollar continues to rally. This is mainly due to the massive amount of money flowing into the commodity markets. Ultimately, as long as we focus on these commodities, it is possible that the Australian dollar will buck the trend when it comes to trading against the greenback, and if we break above the recent consolidation, we could go looking towards the 0.75 handle above, which is an area where we have seen a lot of noise previously.

Breaking down below the 0.7250 level could open up the possibility of a move to much lower levels, which would obviously be a very negative “risk-off” type of situation. All things being equal, that would probably be attached to a market that is seeing the US dollar strengthening against almost everything. The volatility will continue, and therefore you need to be very cautious about your position size until we get some type of clarity as far as a bigger move.

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