The Australian dollar fell quite strongly during the trading session on Tuesday as we broke down to the 50-day EMA on the uptrend line at the bottom of the channel we were in, so it makes some sense for us to abandon the offer.
Having said that, I believe that a break below the uptrend line is a good trading signal as the market may first drop to the 0.66 level and then beyond that to the 0.65 level.
- The 200-day EMA sits above the candlestick for the session and looks like it could offer a significant barrier in the short term.
- In fact, the fact that we’ve failed at that level makes me wonder if we’re going to break the bottom of the wave or not.
- However, if we turn around and remove the candlestick for the session, it gives us a chance to move to the top of the channel, maybe even the 0.70 level.
- The Aussie (see AUD/USD Price Today) is very sensitive to China’s economy showing signs of slowing, with manufacturing PMI figures coming in from last month.
- I think it’s very likely at this point that the Australian dollar will continue to see a lot of trouble, but we have to worry not just about China, but commodity markets in general.
Remember, Australia is essentially a supplier of raw materials to China and the rest of the world, so if the global economy slows down, Australia is likely to suffer as a result.
Since we are between 2 major moving averages, it makes perfect sense that we would see more volatility than anything else.. The market will also have to deal with Friday’s jobs report, which could give us more insight into where the Federal Reserve may be on monetary policy. The Federal Reserve System will continue to have a great influence on the evolution of the dollar in the coming months.
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