(MENAFN- Daily Forex)

• The Australian dollar is looking pretty negative at the end of the session here on Thursday as we initially did try to rally, but that former trend line continues to hold as resistance.
• Furthermore, the 0.6550 level is still an area that I think a lot of people will be paying close attention.
• It's been like a magnet for price, and it has been both support and resistance.

That being said, I believe that the market breaking below the 50 day EMA is a negative sign, but if we were to break down below the bottom of the candlestick, then we could go looking at the 200 day EMA. Anything underneath there opens up the possibility of a breakdown to the 0.64 level. Anything below that level then opens up quite a bit of nasty selling.

PPI Causes Chaos

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That being said, the session featured the PPI number coming out of the United States, being hotter than anticipated as people worried about whether or not the US dollar will continue to strengthen mainly due to the fact that the federal reserve may not be able to cut rates. After all inflationary and this of course is the biggest concern, and inflation pressures will of course be one of the biggest things the Federal Reserve fights.

EURUSD Chart by TradingView

With the PPI coming out at 0.9 % month over month, instead of the expected 0.2%, it looks like inflation could be coming for Americans. And therefore, the Fed's likely to at least start to think about cutting expectations back down for an interest rate cut. I don't necessarily think they'll be looking to high grades, but I think it's a very real possibility they may stay somewhat still. If that's the case, the US dollar is about to reverse against almost everything that's been beating it up as of late. Furthermore, it's probably worth noting that recently we've seen a lot of currencies rally against the US dollar only to fall. And now this last rally just hasn't had the same type of momentum. So, I'm watching the Australian dollar very closely.

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