- The Australian dollar has fallen pretty significantly during the trading session here on Monday as the grinding channel continues to be the way forward.
- Ultimately, this is a market that I think is going to be paying close attention to the 50 day EMA, which of course is basically a trend line at this point, but we also have the channel that we've been in.
- And I think you have to assume that the channel holds at least until it doesn't.
200 Day EMA
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The 200 day EMA is sitting at the 0.6450 level and is offering support. So, if we were to break down below there, I'm more than willing to get extremely short of this market. But right now, I don't think that is what's likely to happen. I think this is a scenario where traders are just on edge trying to figure out what's going on with the global economy and therefore trying to figure out what to do about trading overall.
The Chinese situation between US and China continues to be a major driver of the Australian dollar as Australia is a major supporter and provider of commodities for China. And therefore, it makes sense that the currency just doesn't know what to do with itself.
I do think that there's plenty of support underneath to continue the nonsensical trading that we've seen for months, which is just more of a slow and desperate grind higher. think ultimately though, the real questions will be asked of the 200 day EMA. If we can break down below there, that is an extraordinarily negative turn of events. If we can get a daily close above the shooting star from last week, the Thursday session, then we could go looking to the 0.67 level. But again, I think we're just going to continue to get sloppy grinding trades to the upside.
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