Australian Dollar vs US Dollar Technical Analysis
The Australian dollar initially fell a bit during the trading session on Wednesday but has since bounced a bit from the 0.6575 region. This is an area that has had a massive support level in the past, and the fact that we have plunged the way we have suggests that we are due for a bounce. That’s exactly what I think we are in the process of seeing. But the real question is going to be whether or not we can stay above the 200 day EMA.
If we can, then the next barrier would be the 0.6650 level, followed by the 50 day EMA. On the other hand, if we break down below the 0.6550 level, it’s likely that we see the Australian dollar drop a full handle down to the 0.6450 level. Keep in mind that the Australian dollar is highly sensitive to commodities, but gold is getting a little bit of a push higher and that might help the Aussie.
We’ll have to wait and see. There is a lot of ugliness in the world at the moment, and therefore it does make a certain amount of sense that we have to be very cautious with risk assets such as the Australian dollar. But it’s obvious to me that we are a bit oversold, at least in the short term. So I would be watching out for some type of quick bounce, whether or not it has any legs and can stay afloat for any amount of time. That probably remains an open question.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire