The Australian dollar initially tried to rally Monday but has struggled near the 0.6850 level. Ultimately, this is a market that I think continues to find plenty of sellers on every rally, as we continue to see the US dollar strengthen in general.
Keep in mind that the Australian dollar is highly influenced by commodities and risk appetite, so you will have to pay close attention to both. Beyond that, you also must pay close attention China, which does not exactly look like it’s on fire as of late.
If the Chinese continue to block parts of the economy down, that will also weigh upon the Aussies and their economy, due to the fact that China is its biggest customer. If that is going to be the case, is very unlikely that we are going to see a lot of follow-throughs, so every time we rally, I think it’s probably only a matter of time before we would see more of a jump on top of the exhaustion.
If there is a break above the 0.69 level, then it’s possible that we could go looking to the 50-day EMA, which sits just below the 0.70 level. The 0.70 level is a large, round, psychologically significant figure, and an area that a lot of people will be paying close attention to.
Looking forward for today the Australian NAB Quarterly Business Confidence will be released later in the day.
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