It Is Like Yesterday Never Happened for the Australian Dollar

The Australian dollar has found itself on the back foot initially during the trading session on Friday, continuing the overall bearish pressure that we had seen on risk asset from Thursday. However, we have turned around completely by the time New York opened to form a rather supportive looking candlestick. It is almost as if the previous day never happened, and now we are waiting to see how this all plays out. This screams of consolidation at this point, and therefore I do not necessarily think this is going to be the best market to trade until we get a little bit of clarity.

AUD/USD Video 14.02.22

That clarity will come at the expense of one of these candlesticks, and breaking either above the shooting star from Thursday, or below the hammer from Friday. This type of choppy behavior is normally indicative of a market that is about to go into a very tight range, so I figure it is not my job to fight that, but to simply recognize that we are carving out a couple of boundaries.

Having said all of that, keep in mind that the market is very jittery at the moment to say the least, and therefore the US dollar could pick up a bit of a bid for that reason alone. I would not get aggressive at this point, as the latest headline or more likely than not, the latest words coming out of the mouth of a Federal Reserve member, will probably throw the market into disarray.

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