- The Aussie dollar was all over the place during the early hours on Wednesday as we continue to see a lot of volatility.
- At this point there are a lot of questions about whether or not the Federal Reserve is in fact going to start cutting rates or if they are going to have to stand firm.
That has caused chaos in the market and it's probably worth noting that industrial production numbers were much hotter than anticipated as well as building permits, which by themselves typically don't have a direct correlation to anything, but basically the market is afraid that the Federal Reserve is not going to be cutting rates. That being said, I think you've got a situation where there's a lot of volatility and probably a little less volume than usual. The 0.67 level seems to be support in this market and the 0.6650 level almost certainly being.
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Resistance Above
Above, you have the 0.68 level offering resistance, and I think ultimately, if we can break above there, the market is likely to continue to see resistance near the 0.6850 level. All things being equal, you have to keep in mind that the Australian dollar is likely to continue to see volatility as it is tracked closely to commodities, but it's also likely to follow Asian markets very closely, and what's going on as far as growth is concerned. This is a market that's recently broken out and it does make a little bit of sense to see some noise, but as things stand right now, at least, it still looks like a market that is more likely than not going to continue going higher, given enough time.
That being said, you need to be cautious with your position sizing due to the fact that not only is this chart noisy, but we have seen a lot of noise across the financial world. There will be a lot of position squaring and profit-taking as well as safety trades, so I would anticipate seeing a lot of noise over the next couple of days.
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