The Australian dollar has been all over the place during the course of the week, as we continue to see a lot of noise in both directions, and the 50 Weekly EMA is flat, right along with the 200 Weekly EMA. The pair of course is highly volatile and levered to commodities, which of course makes it a bit of a headache at the moment. Commodities continue to rise, but at the same time, we have seen quite a bit of US dollar strength overall.
AUD/USD Video 21.03.22
Looking at the chart, the 0.75 level above should be a major resistance barrier, so if we can break above there it would be a very bullish turn of events, opening up the possibility of a bigger move to the upside. On the downside, the 0.70 level is a major support barrier, and therefore I think it is difficult to imagine a scenario where we break down below there. However, if we did break down below there, it could open up a flood of selling.
In general, this is a market that is going to be very choppy and move upon the latest whims of risk appetite. This of course makes it a bit difficult, but I think is probably only a matter of time before we have to make a more impulsive move. I think the next several weeks are going to be difficult, so you are probably better off looking at this through the prism of trading more short-term range-bound moves than anything else. Keep your position size reasonable, as I just do not see volatility dropping anytime soon.
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This article was originally posted on FX Empire
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