- The Australian dollar rose early on Friday once more, but as we have seen several times this week, the Aussie will have a challenging time moving higher since it is unable to overcome a clear resistance level.
- This is an area that a lot of people will be paying attention to. The pair has been very noisy, and I think this will continue to be the case going forward.
Aussie Continues to Attempt to Rally on Friday. However…
Once again on Friday, the Australian dollar began the trading day strongly, following a pattern that has been consistent throughout the week. The Australian rallies early in the day, then gives up gains to reverse course and create shooting stars. As things are, there's little reason to think that they will get any better, but since the 200-day EMA is a popular technical indicator, it might contribute to the issue. There's also a lot of consolidation going on there, which naturally means a lot of noise and order flow. Your short-term ceiling is going to be at the 0.6625 level above. Therefore, I do believe that there is a chance that we may move higher by an additional 100 pip or so if we can break over that.
Top Regulated Brokers
However, if we keep selling off in this region above, fatigue will probably set in and the Australian dollar will drop back to the 0.65 mark, which has historically been a critical level and is a bit of a price magnet anyhow. I have considered this from the perspective of consolidation, and I believe that's basically what we're attempting to accomplish here.
More selling would become possible if we were to break below the consolidation's absolute bottom, which I currently believe to be 0.6450. That would most likely be a pro-US dollar trend everywhere, not just here, and it would most likely be related to a move away from risk. Remember that Australia is one of the biggest producers of hard commodities in the world, and that the Australian currency is heavily correlated with the Chinese economy. Having said that, there isn't much to write about in the interest rate differential between these two pairs, so I don't think it matters unless the Federal Reserve starts actively cutting, which would undoubtedly benefit the Australian dollar.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Australian forex brokers to check out.