The Australian dollar bounced a bit on Thursday, as we are sitting at the 200-Day EMA, an indicator that is often watched closely by longer-term traders.
AUD/USD
The Australian dollar has rallied just a touch during the early part of the trading session here on Thursday as we are hanging around the crucial 200-day EMA. Keep in mind the 200-day EMA, of course, is an indicator that a lot of people will be watching very closely, as most longer-term traders look at it as a potential defining indicator that determines where the trend is going.
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I would look at the 0.6950 level as a significant short-term barrier. If we can break above there, then it could open up the possibility of a move to the 0.7069 level, where the 50-day EMA sits. This could be a nice barrier, or even a ceiling if we do, in fact, rally.
Potential Support and Breakdown Levels
If we were to break down below the lows of the last couple of days, then we could see the Australian dollar looking toward support at the 0.6835 level. Anything below there then opens up the possibility of the market dropping down to the 0.67 level. That's an area that previously had been massively resistant, so I think it'd be interesting to see how we reacted there.
All things being equal, I think the Australian dollar is trying to stay in some type of range. So, watch that 0.6950 level because if we can break above there, then we might re-enter a sideways market. This has been the overall attitude of the pair for several months until recently.
The next day or 2 should be rather crucial; it could give us an idea of where we go longer-term. Ultimately, this is a market that is very noisy, but I also recognize that we are in an area where we could, in fact, see a bit of a bounce.
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