The Australian dollar initially tried to rally during the trading session on Monday but has struggled above the 200 day EMA yet again as it looks like we are ready for some type of pullback. At this point, the real question is going to be whether or not the pullback is something substantial, or if it is just a quick pullback in order to find value?
AUD/USD Video 19.10.21
With all of this in mind, the reality is that the market will more than likely continue to be very noisy, but we have seen an attempt to break above the 200 day EMA recently rebuked, and therefore one has to take a serious look at what is going on right now as to whether or not it could be something more important. With that in mind, I do believe that we are probably in a scenario where we are looking at a move that will continue to show the concerns in China, as Australia is so highly levered to that economy.
With that being the case, you will have to pay attention to economic figures coming out of China, and of course more hints about the economy slowing down in general. The recent concerns with Evergrande have taken center stage, and I think that will continue to be somewhat psychologically important to pay attention to as well.
Australia is starting to open up a couple of its lock down areas, so that does help the Aussie economy in theory, but if there are a serious lack of customers out there willing to buy commodities, that may not matter. Pay attention to the US Dollar Index, it obviously has its own importance as well.
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This article was originally posted on FX Empire