- The AUD/USD rallied quite nicely early during the trading session on Monday as we continue to range-bound trade overall.
- In general, I believe this is a market that will continue to see a lot of volume and volatility in this area as we are trying to sort out what to do with the US dollar and the Australian dollar because it has so many major influences outside of Australia itself, for example, China.
It’s Been Rangebound
I think this is a market that is still very much in the same range it's been in for a while, as the 0.6650 level above is a significant ceiling and the 0.6450 level underneath is a significant floor. We do have the 50 day EMA sitting just above and that could cause a little bit of technical resistance right along with the 200 day EMA, but keep in mind both of these moving averages are essentially flat, so I don't know that we'll pay a lot of attention to them. I think more importantly, you're just watching the levels on the outside of the consolidation.
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The rally early Monday is a good sign, but you have to keep in mind that this is a market that doesn't really know what it wants to do. I think we just grind back and forth for a while as we try to sort out whether or not we can finally break out of this range.
If and when we do, you could be looking at a 200 point range. Until then, I think you have to look at this through the prism of sideways trading and look for range bound trading systems to take advantage of this. Otherwise, there probably isn't a whole lot to do quite yet. I think this is a market that continues to be sideways more than anything else, but we also have a very clearly defined area of trading that we need to pay close attention to.
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