- The Aussie dollar continues to look very weak and on Tuesday we have in fact fallen toward the 200 day EMA.
- The 200 day EMA will probably offer a bit of support as it is an important indicator for technical analysis.
- But this is a market when you look at the length and the totality of it, you can see just how obvious everything is as far as weakness.
The New Zealand Central Bank has an interest rate decision early Wednesday morning and there will be a little bit of a knock-on effect over here, but at this point the 0.6550 level has held as massive resistance multiple times despite the fact that we did break above there. Quite frankly, this is a situation where I continue to fade rallies. This currency, despite the fact that the US dollar had been weak for quite some time, it was still pretty quiet. That tells you a lot when currencies like the Euro and the pound are just destroying the U S dollar and the Australian dollar is simply going side with, with a slight upward tilt that if and when the day comes that the US dollar strengthens, the Aussie is going to get crushed.
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I think we're in the middle of starting to see that now. If Fed Chair Powell does not sound extraordinarily dovish at the end of the week, it's probably the end of the attempt to rally for the Aussie. On the other hand, if he sounds extraordinarily dovish, then if we can break above the 0.6650 level, then you can make an argument for a bigger move, but we're light years away from that.
At this point, the Australian dollar continues to struggle against the US dollar, and I think that continues to be the way forward.
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