The Australian dollar has rallied a bit during the course of the trading session on Wednesday, but stayed within the tight consolidation area that we have been in. The 50 day EMA is essentially a magnet for price, and at this point unless you are a short-term scalper, it is going to be difficult to trade the Aussie dollar. As you can see, the market has seen a lot of selling pressure just above the 0.78 handle, just as the market has seen support just below the 0.77 handle.
AUD/USD Video 10.06.21
Looking at this chart and this market in general, I think what we need is some type of catalyst. Whether or not we get it might be a different question, but at this point in time it is likely that the CPI numbers on Thursday will be the most important figure for the week, as it could give us a sign of what inflation is actually doing in the United States.
That being said, what we should keep in mind is that the commodity market has been booming while the Australian dollar has done almost nothing over the last several months. This might be because the Chinese and the Australians are in a bit of a trade spat, but at the end of the day the Chinese will more than likely come back to Australia for coal as an example, as China is in desperate need of raw materials. At this point time, it has become a bit of a game of “chicken.”
Until we get some type of clarity, I suspect that this is going to be a tough market to get overly large and, but if you are comfortable with the five and 15 minute charts, this might be an acceptable market.
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