The Australian dollar tried to rise at the beginning of the Friday session, But it lost ground as inflation figures in the US came in much higher than expected. At this point, the Australian dollar seems ready to continue falling, and may test the 0.70 level. The 0.70 level is the area that a lot of people will focus on, as it is a large, round, and psychologically significant number.
If we break below this level, we will likely go to the 0.69 level, from where we bounced previously. If we collapse below that level, we can go further. Ultimately, I think the Australian dollar will remain a bit weak, given the fact that we are starting to see a lot of concerns about global growth in general, and the Chinese economy itself. However, the market is likely to continue to see a lot of volatility, as the Australian dollar is linked to some commodities that are starting to show signs of strength..
It is also worth noting that the 50 day and 200 day moving averages are causing quite a bit of noise, so it makes sense that we will see a pullback from there. If the market does turn, I think we will need to break above the 200 day EMA in order to go higher. This will basically be a break above the 0.7250 level, Which seems a bit improbable at this point. However, you should also pay attention to interest rates in the US, as they continue to rise, and obviously this will have a very bullish effect on the dollar.
If we experience some kind of “risk aversion”, We will likely continue to see money heading into the USD, as usual due to the longer-term correlations. Unless the Fed decides to change its overall stance, I think we should look at advances with a certain amount of skepticism and go in for signs of fatigue every time we have the opportunity. The pair is likely to continue to fluctuate, so this should be taken into account when placing money to trade.
The chart was generated by . platform TradingView