- The Australian dollar initially did try to rally during the day on Monday but has turned around to show signs of hesitation.
- The candlestick is a bit of an inverted hammer, but I think ultimately, we have to look at this through the prism of whether or not risk appetite is going to pick up.
- After all, the Australian dollar is considered to be a “risk on” currency, and that means that traders will buy it when they feel like the markets are going to go higher on the whole.
This makes quite a bit of sense, due to the fact that the air floors around the world will continue to cause issues as far as risk appetite is concerned, and of course we have seen commodity markets get hammered. With that being the case, then I think you have to look at this through the prism of a market that simply has no real momentum. Furthermore, the Australian dollar is highly levered to the Chinese economy, which has its own issues. While China seems to be doing better than it once was, the fact that they have stepped up tariffs on both the United States and Canada suggests that we are going to see a bumpy patch going forward.
Top Regulated Brokers
Technical Analysis
The technical analysis for this pair is somewhat sideways, with the 0.64 level above offering a significant resistance barrier, especially as the 200 Day EMA sits just above there, and could cause a bit of resistance in and of itself. Underneath, we have the 0.62 level offering a certain amount of support, and that is an area that I think we will have to watch very closely. If we were to break down below that level, then I think we’ve got a situation where traders will continue to look at this as a proxy for risk appetite, and of course trying to figure out whether or not we are going to continue to see people run away from risk, and as long as that’s the case, the Australian dollar will suffer.
Ready to trade our daily AUD/USD Forex analysis? Check out the best forex trading platform for beginners Australia worth using