Aussie Testing Major Support for the Week
The Australian dollar is falling rather hard against the United States dollar again, as we are trying to break down below the 0.70 level. If we do on a sustained basis, we could see a significant break down in the Aussie, with the first target being the 0.68 level, and then possibly the 0.66 handle over the longer term. Because of this, I think what we have here is a situation where we are looking to fade any rallies, as we are most decidedly in a “risk off” type of environment. Given enough time, I do think that we get the breakdown, but I also recognize that we need to be somewhat cautious with the possibility of a relief rally.
AUD/USD Video 31.01.22
The candlestick certainly is very negative looking, and of course we did see the markets roll over a bit during the previous couple of weeks, so I do think that there is momentum to the downside, but we do have a little bit of choppiness ahead. If you are more of a longer-term trader, then you recognize that there will be some noise from time to time that you need to deal with. The Aussie of course is highly levered to risk appetite and of course China, so please keep that in mind as you position size. The US dollar will continue to get a boost from the interest rate market as well, so that is another thing that will probably push this pair lower. Nonetheless, unless something fundamentally changed with the risk appetite of traders around the world, I will not be a buyer of this pair.
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This article was originally posted on FX Empire
