The Aussie dollar rallied a bit early during the trading on Friday but has struggled to take off again. The strong US dollar continues to see buyers in general.
AUD/USD Trades Between Key Technical Levels as Sentiment Stays Fragile
The Aussie dollar rallied a bit early during the trading session here on Friday to break above the 0.6950 level, but it has since given back some of those gains. That tells me that we still have a lot of uncertainty out there that people will be watching as to whether or not we can find some type of reason to get bullish or bearish, for that matter.
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Ultimately, I look at this as a market that is going to be very sensitive to risk appetite. I think it's a market that is being sandwiched between the 50-day EMA and the 200-day EMA indicators, and that is typical. When you find yourself between those two indicators, you have a lot of traders in both directions paying close attention.
A Crucial Decision Looms Inside the EMA Sandwich
Ultimately, I think this is a market that, given enough time, we will have to make a bigger decision, and I also recognize that this 200-day EMA underneath is being used, at least at the moment, by technical traders as a potential floor. With that being said, if we were to break above the 50-day EMA, I think that would be extraordinarily bullish. In that environment, then I think you have to have the discussion as to whether or not we really start to launch towards 0.71.
Keep in mind Australia is highly sensitive to risk appetite, so if we were to break down below the swing low here at basically 0.6870, then the market falls to the 0.67 level. This should be a sign that the US dollar is stronger worldwide is my suspicion.
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