- As traders linger around the same general range on Monday, the Australian dollar remains fairly sideways and exhibits a severe lack of momentum at the moment.
- In other words, I am not looking for a massive move in the short-term.
Aussie Dollar Continues to See Sluggish Trading
In sluggish trade on Monday, the Australian dollar is still consolidating. There is a lot of back-and-forth trading as the Australian dollar price continues to consolidate and fluctuate. In the end, I believe that the 0.65 level is a bit of a price magnet. However, you have to see it now through the lens of a market that still views the 0.66 level above as resistance and the 0.6450 level below as support. If you are trading the Aussie dollar in the interim, I believe you are only seeking short-term chances because, very honestly, we have nowhere to go. Having said that, take note of the fact that the 200-day EMA and the 50-day EMA above are providing some resistance. Concerns about the Federal Reserve's future actions on interest rates are still prevalent in the market.
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Having said that, we also need to be very aware of the market and its risk appetite profile because the Australian dollar is seen as somewhat of a risky currency, and the US dollar is still seen as a safe haven. As long as these two currencies continue to interact, this market will essentially be lost because there are so many competing interests that nobody is really sure what they want to do in this situation. As long as that is the case, I think you have a hard time putting a lot of money into the market.
I believe you will make significant progress if we are able to break out of this consolidation area. And it would most likely be a collapse below the bottom if I had to bet on one or the other. We are more likely than not to reach the 0.63 level in that case. However, if we were to break over the 0.66 mark, our next targets would be the 0.6750 and, ultimately, the 0.6850 levels. These areas are the longer-term possibilities, but it will take some work to do that.
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