The Australian dollar went back and forth on Friday again, as we are challenging the 200-Day EMA indicator, which obviously attracts a lot of attention.
AUD/USD
The Australian dollar has been choppy again on Friday, continuing the overall sideways action at the 200-day EMA that we had seen on both Wednesday and Thursday. I think this is an area that a lot of people will be watching very closely, as it has been influenced by the importance of the 200-day EMA and people trying to figure out what's happening next with risk appetite.
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It's worth noting that the Australian dollar is considered to be a highly influenced currency as far as risk appetite is concerned, and it's difficult to get overly aggressive on the Australian dollar at the moment, with the US dollar being so strong. That being said, if we were to break down from here, then we could send this market toward the 0.68 level.
If we rally from here, the 0.6950 level is an area that I'll be watching very closely, as it is an area that had been significant resistance previously as well as support, so I'm looking at that as a potential problem.
Technical Support Levels and Risk Appetite Sentiment
Anything above there does get interesting to me because it shows the Australian dollar strengthening against the US dollar, which obviously is a very strong currency at the moment, but it also shows the 200-day EMA offering support—something that you see on these big swings quite often. If we break down here, we probably see the US dollar strengthen against most currencies, and the Australian dollar won't be any different.
With all of that being said, I think this is a market that is just waiting for some type of external validation for the next move, so it's simply put, a situation where the next big candle we get, I'm trading in that direction.
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