Given the noise and uncertainty surrounding the global economy, the Australian dollar is likely to continue to show volatility.
- The AUD/USD exchange rate showed minimal activity on Monday, reflecting the prevailing noise in the market.
- The 50-day exponential moving average is currently acting as resistance, adding to the subdued nature of the market.
- Over time, the market is likely to break out of its current range.
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However, for now, the 0.66 level has significant support. A break below this level would open up the possibility of a decline to the 0.64 level, which represents the anticipated “measured move” from the previous consolidation range. If the market reverses and crosses the 50-day Exponential Moving Average (EMA), the next target could be the 200-day EMA. Furthermore, the 0.68 level, which served as the top of the previous consolidation area, becomes a critical resistance zone. It is important to note that the market is likely to remain noisy, mainly due to uncertainty about the future trajectory of the global economy. As a result, it is prudent to be cautious and recognize the inherent volatility of the Australian dollar. To gain confidence in the direction of the market, traders should wait for impulsive candlestick patterns that provide clearer indications of potential future moves. In the meantime, it’s advisable to be careful with position sizes and expect to move back and forth frequently price action.
It is important to note that Tuesday is Independence Day in the United States, which will further add to the choppy and noisy nature of the market. As a result, market participants should view the current environment through the lens of hesitancy and uncertainty. However, a clearer market direction is likely to emerge over time. Patience will be key during this period as impulsive moves can take time to materialize. It is wise to maintain a patient approach when considering position size.
In conclusion, the Aussie dollar saw limited activity on Monday, reflecting the noisy trading conditions in the market. The 50-day EMA functioned as resistance, which contributes to market consolidation. The 0.66 level remains a significant support level, while a break below it could lead to a potential decline towards 0.64. Conversely, a break above the 50-day EMA could target the 200-day EMA and the 0.68 resistance level. Given the noise and uncertainty surrounding the global economy, the Australian dollar is likely to continue to show volatility. Traders should wait impulsively candlestick patterns get a clearer overview of the direction of the market. During this period of back and forth price action, it is important to be cautious and keep position sizing in mind. With the upcoming Independence Day holiday in the United States, market conditions may remain choppy and uncertain. Patience and vigilance will be key for traders in this environment.
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