- In my daily analysis of the AUD/USD pair, it’s worth noting that we continue to hang around the same support level that we have been watching closely for some time.
- I am talking about the 0.6550 level, an area that has been both support and resistance over the longer term, and over the last 48 hours we have seen that area offer similar support yet again.
Keep in mind the Friday is the Non-Farm Payroll announcement, and therefore we could see a lot of noisy behavior. Ultimately, this is a situation where that level will continue to be important, but we could finally get some type of momentum due to the jobs report as it does tend to throw see the US dollar around quite drastically. All things being equal, I do think that can anticipate a lot of noisy behavior over the next 24 hours.
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Technical Analysis
The technical analysis for this pair is interesting, because it is very negative, but at the same time, we also have the support offering a significant amount of pressure as well. If the market were to break down below the 0.65 level, then I think the bottom falls out, and the Australian dollar collapses, probably more to do with strength in the US dollar than any particular weakness in the Aussie itself.
On the other hand, if we were to turn around a break above the 0.66 level, then I think we have a situation where the market could go looking to the 200 Day EMA above, near the 0.6650 level. The 200 Day EMA is an indicator that a lot of people will of course pay close attention to, and therefore I think we’ve got to pay attention to how the market behaves in that general vicinity. If the market were to show signs of exhaustion, that could be a nice shorting opportunity as well. If we break above there, then in theory it could change the trend but I don’t see that happening very easily right now.
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