- The Aussie dollar has shown itself to be rather negative during the trading session on Friday, despite the fact that the US dollar itself got hammered against quite a few currencies.
- This shows just how ugly the Australian dollar is at the moment and the fact that we are at the 0.63 region makes sense.
- It's an area that's been important for some time, and it's also worth noting that the market is trying to form some type of bearish flag.
- Whether or not that actually pans out remains to be seen. But I would say that the market is likely to bounce around between the big figure handles.
The 0.64 level above is a swing high that we will be paying close attention to because if we could break above there, it'd be a very positive sign. However, the fact that everything else is just skyrocketing against the greenback, but the Australian dollar and the New Zealand dollar both can't tell you the money is not flowing to that part of the world. It's not a huge surprise because the Australian dollar is considered to be a major commodity currency, and therefore, as commodities slip, it makes a certain amount of sense that the Aussie dollar would as well.
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Fading Rallies?
With this being said, I think you've got a situation where you will probably continue to fade rallies until we break above the crucial 0.64 level. The 0.62 level underneath could be support, but right now I think we're just bouncing around. We're hanging around the 50 day EMA and we're trying to determine where the longer term momentum is. Right now, it does not look good considering when you look at other currencies, what they're doing to the dollar. Because of this, we could also extrapolate that the commodities sector might do poorly.
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