The Australian dollar has gone back and forth during the course of the trading session on Wednesday as we are sitting just above the 200-day EMA.
AUD/USD
The Australian dollar has gone back and forth during the course of the trading session on Wednesday as we are sitting just above the 200-day EMA. The 200-day EMA is an indicator that a lot of people will watch very closely to get an idea as to how the trend is playing out.
If we can break above the 0.6950 level, then the market could go looking to the 50-day EMA, which is right around the 0.7025 level. If we were to break above there, then it opens up a move to the 0.7150 level. This would be a move that makes sense in general, if we see US dollar selling across the forex world.
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Commodity Sensitivity and Key Inflection Points
On the other hand, if we turn around and fall from here, perhaps dropping below the 0.6850 level, then it opens up a move down to the 0.67 level, where we had seen massive demand come into the picture. Remember that the Australian dollar is highly sensitive to commodities and how they are moving, and of course, with that being the case, you need to keep an eye on how gold and other metals are behaving. Right now, they seem to be pretty poor, so that's part of what's keeping the Australian dollar somewhat soft.
I think we are at a major point of inflection that a lot of people will be watching, and the next major impulsive candlestick could very well end up being a sign of where we go next. I think it's going to take quite a bit of effort to make this thing move for a bigger trade, but given enough time, we will get that impulsive and obvious candlestick to start.
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