The Australian dollar went back and forth during the trading session on Friday, as we continue to see the area just above at the 0.65 region is a major resistance barrier. Ultimately, this is a market that I believe will continue to see a lot of noise, but I also prefer selling rallies closer to the 0.65 handle. We are building up massive tension in the Aussie dollar, but at this point it appears that we just do not have the momentum to break out quite yet. That is not a huge surprise, as we head into the weekend a lot of people will be looking to take a lot of risk in general.
AUD/USD Video 18.05.20
The 50 day EMA underneath continues offer support, and if we were to break below that level it is likely that the Australian dollar will drop towards the 0.6250 level. To the upside, I believe that the 0.66 level is a major resistance barrier, so fading anything that gets between 0.65 and 0.66 levels makes quite a bit of sense, because if we were to finally break above that region, then you start to look at a longer-term trend and structural change in what happens over the next couple of years. Quite frankly, at that point the Australian dollar is an investment. However, that looks very unlikely to happen as the rate of change continues to slow and now that we are stagnant at a major resistance barrier, it looks as if a breakdown will happen, but it certainly is going to take its time.
Summing up, the Australian dollar continues to see a lot of back and forth in the short term, but ultimately this is a market that I believe will continue to be very noisy, as we are running out of momentum in general.