(MENAFN- Daily Forex) The Aussie dollar has rallied during the trading session on Thursday to break significantly above the 50 day EMA. That being said, the market is almost certainly seen more influence from the channel than anything else. This looks like a market that is trying to continue its recovery, and it is probably worth noting that the Australian dollar is highly sensitive to the Asian part of the world, which has seen an explosive move over the last couple of days. Because of this, the lifting of the Asian stock indices could be having a little bit of an effect here .
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Regardless, we have a well defined channel that we should be paying close attention to . I am going to be looking at this chart quite a bit, as it looks like we are also threatening a bit of horizontal resistance above at the 0.73 level. At that point in time, I would suspect that the longer-term traders will start to look at this as a significant break out as well, especially as we would be threatening the 200 day EMA.
Keep in mind that the US dollar has been relatively strong over the last several sessions, but quite frankly the Australian dollar - as well as the British pound - have both been outliers when it comes to problems against the US dollar. Whether or not that can continue is a completely different question, but at this point in time the Aussie looks as if it is one of the stronger currencies out there . As China seems to be starting to pick up a little bit internally, that may help the Aussie as well.
If we were to turn around a break down below the 0.7150 level, that could be a major problem, sending the Aussie much lower. At that point, I think it would be somewhat of a given that we may go looking towards the 0.70 level underneath, which is a large, round, psychologically significant figure, and of course an area that we have visited recently. If we break down below there, then the Australian dollar will probably breaking down quite drastically for a longer-term move . However, on a move higher and above the 200 day EMA, I see no reason why this pair cannot get to the 0.75 handle.
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