The Aussie dollar tried to rally at the start of the session, but the 200 Day EMA continues to offer a bit of resistance.
AUD/USD
The Aussie dollar has initially tried to rise during the session here on Monday but continues to see a lot of resistance near the 200-day EMA. I think we're in an area that we need to pay very close attention to as the 200-day EMA will be important, and it has, in fact, offered quite a bit of resistance.
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If we were to turn around and break to the upside, the 0.6950 level could be targeted. Anything above there, I think, opens up the possibility of a move to the 50-day EMA, maybe even higher.
US Dollar Strength and Global Macro Headwinds
But as things stand right now, it's interesting that the US dollar continues to be very strong. And if we can break down below the 0.6850 level, then I think it opens up a move down to the 0.67 level. Ultimately, the US dollar has been stronger than most other currencies, and I think the Australian dollar is finally starting to buckle under that pressure.
The RBA is likely to have to pay close attention to the issues that we have in the global supply chain and the issues that we have with the potential world economy overall.
All things being equal, this is a market that I think will remain very noisy, very difficult. But again, we are at an area in the form of the 200-day EMA that I think a lot of people will watch closely because it has such a major influence on the longer-term trend.
If the US dollar continues to strengthen against everything else, I suspect that we will drop. If it starts to sell off, this might be a good area to try to find value in the form of the Australian dollar.
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