- I’m taking a closer look at the recent dip in the Australian dollar as it approaches the 200-day EMA, especially amid a stronger US dollar.
- Although there may be some short-term gains, I still feel bearish and am watching key support around 0.64 and resistance near 0.6650-0.67.
On Tuesday, the Australian dollar experienced a slight decline while testing the 200-day EMA, which many traders see as a potential support level. Overall, I think the market is still quite volatile.
It’s important to point out that the US dollar has been gaining strength overall, while the Australian dollar has been lagging for quite some time now. I believe there will be ongoing selling pressure on the Australian dollar. Any short-term bullish trends will likely get sold off quickly at the first hint of fatigue. I’m particularly focused on the 0.6550 mark because the 50-day EMA has more or less indicated fair value recently.
If it dips below this level, we might see the 0.64 point come into play. That’s a significant, psychologically important level that has offered substantial support. A drop beneath that threshold could lead to further declines towards 0.62. I sense that a short-term rally may lead to signs of weakness fading away.
with a higher break
Should it manage to break past 0.6650, there’s potential for movement toward 0.67. However, it’s essential to keep in mind that the Australian dollar is quite responsive to global trade dynamics and US-China relations, which complicates the outlook. Right now, the sentiment seems more bearish than bullish, though it feels a bit uncertain. Still, if you’re into range trading, this market could be worth evaluating.
Christopher Lewis has been involved in foreign exchange trading for over 20 years, bringing a wealth of experience in the financial market. He has contributed to the Daily Forex site since its inception and also writes for various online platforms, including FX Empire and Investing.com. Known for his focus on technical analysis to identify trades, he also enjoys dealing in stock indices and commodities, favoring a long-term trading approach where positions can last several days or even weeks.
