(MENAFN- Daily Forex)
The australian dollar pulled back a bit during the trading week on Monday, showing signs of hesitation. The market is being squeezed between a couple of moving averages, with the 50-Day EMA sitting at the 0.66 level, and the 200-Day EMA sitting near the 0.69 level. That being said, the market squeezing between those 2 moving averages typically makes the market a bit volatile and then will shoot in one direction or the other.
Advertisement got a position to try? don't wait! trade aud/usd now Choppiness and Noisy Behavior Ahead
I do believe this point we will continue to see a lot of choppiness between now and the final breakout , but with the week having several important announcements, it does make sense that we would continue to see a lot of noisy behavior. That being said, the market will be paying attention to the Core PCI numbers, which the Federal Reserve likes to pay close attention to due to the inflation aspect, and that of course the jobs number coming out on Friday.
This is a market that will continue to be noisy, but I think we are going to bounce around between these 2 moving averages in order to show signs of consolidation before we make a bigger move. At this point, we are more likely than not going to see a lot of choppiness over the next couple of days, so I would not get overly aggressive with any particular type of position . Ultimately, I think a range-bound system will probably work out best most of this week, but once we break out of the area that we are in right now, we could see a huge move. To the upside, the Australian dollar would almost certainly go look into the 0.70 level on a shot to the upside, but on the downside, we could go as low as 0.64, maybe even down to the 0.63 level after that.
Keep in mind that the Australian dollar is highly levered to Asia, which of course is in a state of flux right now, especially with the Chinese lockdowns coming back. Furthermore, the commodity market has major outsized influence on the Aussie dollar as well, so keep all of this in mind when you start to put money to work, or if you choose to stay away from it. Ultimately, this is a neutral market that is ready to make a bigger move.
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