- During the trading session on Monday, we saw the AUD/USD pair rise rather significantly, but at the end of the day, we have also seen the market pull back a bit.
- What’s interesting to me is that we have seen the US dollar fell against most currencies during the day, but the Australian dollar is probably one of the worst performers in relation.
- Because of this, I believe that we are on the precipice of the Australian dollar getting hammered, just because on a day where everybody else had a good time against the greenback, the Aussie was left looking a little blasé.
Technical Analysis
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The technical analysis for this AUD/USD market is rather dire, but it does make a certain amount of sense that we could see a little bit of a rally from here, due to the fact that we had gotten so oversold. The 0.62 level seems to be offering a bit of a floor in the market, at least for the time being. That being said, if we were to break down below the 0.62 level, I suspect that the Australian dollar will go looking to the 0.61 level.
What I find interesting is that the Atlanta Federal Reserve is starting to suggest that the economy is getting worse, not better in the United States. However, the timing of this is a bit suspicious, as politics has clearly had a role to play in this. The market also have to keep in mind that what’s going on in China will be a major factor, because quite frankly, the Australians have very little of an economy outside of what they send to China. In other words, as goes China, so goes Australia.
If we continue to go higher, then the market probably goes looking to the 0.63 level, an area that has been important more than once, as the 50 Day EMA is sitting in that area, and I think you’ve got a situation where there will be a little bit of a barrier when it comes to that level. In other words, I suspect that this is a “fade the rallies” type of scenario.
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