Australian Dollar vs US Dollar Technical Analysis
The Australian dollar has bounced just a bit during the early hours on Friday, as the market has finally recognized that it is perhaps a bit oversold. At this point in time, we are hanging around the 0.6550 level, an area that has been somewhat important. That being said, if the market were to break down below here, then we could go look into the 0.6450 level, an area that has been massive support.
If the market does rally from here, I would pay attention to the 200-day EMA just above the 0.66 level, and then again pay attention to the 50-day EMA at the 0.6650 level. Both of those could be a potential barrier to continuing a rally. At this point, I think you’re probably more likely than not going to see a little bit of a short-term bounce, but whether or not it lasts remains to be seen.
You are just simply going to have to look around at the US dollar and see what is going on around the world. As things stand right now, it’s probably worth noting that the Federal Reserve is likely to cut sometime this year, but not as likely as many other central banks. So, it still favors the US dollar, I believe, overall, from the intermediate term. And until the Fed actually acts, I think you’ve got a situation where the upside limited a bit here in this market. I think we just continue to chop back and forth. But with this oversold condition, you would anticipate a little bit of a bounce.
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This article was originally posted on FX Empire