• The first thing I noticed is that the market is running into trouble above the 50 Day EMA.
• Ultimately, this is a market that I think continues to see a lot of noisy behavior in indecision, mainly due to the fact that the Australian dollar is so highly sensitive to the commodity markets, and of course the idea of global growth or weakness.
• After all, if the global economy demands more commodities, due to growth of course, then it makes sense a lot of people are jumping into the Australian dollar.

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Ultimately, this is a situation where traders will continue to look at the scenario as one that is measured in “risk on or risk off” behavior. With this, I think you have to believe that traders are trying to express the idea that perhaps things aren’t as rosy as pictured, and if that ends up being the case it makes a significant amount of sense that the US dollar would strengthen. After all, the AUD/USD currency pair is considered to be a “safety currency”, and that of course attracts quite a bit of attention in and of itself.

Buying the dip?

The question of course is whether or not people will start to buy the dip, with the 200 Day EMA sitting near the 0.66 level, it could be an area that people pay close attention to. A bounce in that area would make a certain amount of sense, it would show that there are still value hunters out there looking to get involved. However, I also recognize that if we were to turn around and break above the 0.67 level, that would be very bullish for the Australian dollar, perhaps sending more of a “risk on” attitude into the markets overall. I do not like the idea of getting too aggressive one way or the other, but it’s probably worth noting that this week is rather light when it comes to the economic calendar, and that might give people more interest in trying to take on risk.

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