(MENAFN- Daily Forex)

• The Australian dollar fell initially during the trading session on Wednesday again, testing the crucial 0.6550 level.
• The 0.6550 level is an area that a lot of people will be paying attention to as it has been a magnet for price. Furthermore, we also have the 50 Day EMA hanging around in this area, and I think what we are looking at is a market that is trying to sort out where to go next. After all, the Australian dollar has been somewhat sideways for a while, and at this point in time it's worth noting that the US dollar is strengthening against multiple currencies around the world.

Risk Appetite

Risk appetite of course is a major driver of the Australian dollar, and it'll be interesting to see how the Australian dollar reacts to the other markets overall. It is worth noting that while risk appetite was fairly strong as of late, the Australian dollar hasn't behaved in the same way you would expect. Quite frankly, the Australian dollar has been very lackluster, and that may continue to be the case. Even if we were to rally from here, I would anticipate that the 0.6633 level continues to offer short term resistance, and if we can break above then opens up the possibility of a move to the 0.67 level, where we had seen a lot of resistance.

On the other hand, if we start to break down from here, the 0.6492 level is an area where you might see support due to the fact that the 200 Day EMA sits there but breaking down below that could really kick off a massive move to the downside as the Australian dollar will be sold off quite rapidly. In the short term though, I anticipate that this is more or less a sideways market, as the Australian dollar has been very choppy over the last several months.

EURUSD Chart by TradingView

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