- During the trading session on Friday we've seen the Aussie drop somewhat significantly against the Kiwi dollar in what is typically a very choppy currency pair.
- That being said, what I find interesting about this is that the Australian dollar has fallen to the 200 day EMA for the third or fourth time this week and the 1.10 level sits right there as well.
- Because of this, one has to wonder what the ramifications are at this point of the 200 day EMA.
Keep in mind that this is a market that you can use to figure out how to trade the Australian dollar and the New Zealand dollar against the U.S. dollar through a process called triangulation.
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What I mean by this is that in its current form, this pair suggests that we are in fact going to see the Australian dollar be a little weaker against the greenback than the Kiwi dollar. And you are seeing that right now, if we break down below the 1.10 level, it's very possible that not only do we see the market drop towards the a 1.0950 level, but it's also very possible that we see the Australian dollar really underperformed the New Zealand dollar against the U S dollar. So, remember all of this works together.
It's a game of relative strength or in this case, possibly a weakness as far as trading this particular market, I am looking forward to seeing if we bounce. And if we take out the 1.1040 level to the upside, then I would anticipate a continuation of overall longer term upward grind. You do have to be very patient with this market because it takes its time getting to where it wants to go, but it is important because it gives you an idea of how the antipodes will behave against the U S dollar overall.
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