- During the trading session on Monday, we have seen the Australian dollar plunged against the US dollar, which is a massive “risk off move” for currency traders.
- That being said, the Aussie dollar is still very much still range bound, despite the fact that Friday was so ugly.
- When you look at this chart, the 0.62 level has been a major floor in the market over the last several months, so it’ll be interesting to see what happens if we do find yourself in that general vicinity.
- If we were to break down below there, then you could see an attempt to get back down to the 0.61 level.
Risk Appetite
Remember that risk appetite is all over the place right now, and with the new tariffs coming into play on April 2, it’ll be interesting to see how the Australian dollar behaves, because it is considered to be a proxy for the Chinese economy. With the market bouncing the way it has between the 0.62 level and the 0.64 level, then I think it shows just how “up in the air” we are when it comes to the idea of what the global economy might do.
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Ultimately, it’s probably worth noting that the 50 Day EMA is hanging around the 0.63 level, which is the top of the candlestick that we just formed for the session, as well as the 3 previous ones. If we were to turn around and break above the 0.6350 level, then you have the specter of the 0.64 level as a major ceiling.
The 200 Day EMA sits just above there and is falling, so I think this is a situation where it is probably only a matter of time before we see that level because quite a bit of issues for buyers. However, if we were to break above there, then the market could really start to take off to the upside, but I think you would have to see a lot of risk appetite out there when it comes to indices, as well as riskier currencies. As things stand right now, I think we stay in this range.
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