• The Australian dollar has been all over the place in a very tight range during the trading session on Friday as we continue to dance around just below the 50 Day EMA.
• Keep in mind this is a currency pair that is still very much range bound, but we have to pay close attention to the 50 Day EMA, as it is an indicator that a lot of people will watch, and it could cause some noise here and there.
• However, this is a market that I think will continue to see volatility, but mainly through the short term perspective.

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Technical Analysis

The Australian dollar continues to be very sideways overall, and as we are close to the 0.63 level, we need to recognize that the market is essentially hanging about in what people would consider “fair value”, and with that being the case, the market will continue to bounce around this area, but you should also pay close attention to the idea that we are in the 200 pip range, with the 0.62 level underneath being the floor, and the 0.64 level above being a ceiling.

It’s also worth noting that the Australian dollar and the Australian economy are both highly levered to the Chinese economy, and that is something worth paying close attention to, because all of this talk about terrible wars will continue to have people worried about whether or not the Chinese will be shipping goods around the world and therefore demanding Australian commodities such as iron and copper. This obviously is a situation where things will be fluid, but keep in mind that the Australian dollars quite often a way for currency traders to play China itself.

With all these factors going on at the same time, it does make a certain amount of sense that the market just sits here and grinds back and forth. I’m not expecting big move, but if we were to leave the 200 point range, it does suggest another 200 pips in which of her direction we go based upon the “measured move.”

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