The Australian dollar has gone back and forth during the course of the trading session on Monday, as the 200 day EMA has come into the picture to offer resistance. The market rallying is a little bit of an extension from Friday, which should be noted that was highly influenced by the jobs number. That being said, the market has been less than impressive on Monday, and with that being the case I think what we are looking at is a bit of a “dead cat bounce.”
AUD/USD Video 06.07.21
One thing to keep in mind is that the Americans were away on the extended Independence Day holiday, so that of course comes into play as well. That being said, the market breaks down below the 0.75 handle, then it is very possible that we could go looking towards the lows, and then perhaps even break down quite drastically from there. This would be a major “risk off” type of move, and therefore I think it would be somewhat obvious as to what would be the main driver. All things been equal, we still looks very vulnerable and therefore I think that shorting this market is still more likely than not going to be the biggest move.
The 50 day EMA above is racing towards the 0.76 handle, which of course is a significant area where we had formed a couple of shooting stars, and therefore a significant resistance. All things been equal, I think this market more than likely goes much lower, especially if we break down below the Friday candlestick to reach towards the 0.71 handle over the longer term.
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This article was originally posted on FX Empire
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