The Australian dollar has initially rallied during the course of the trading session on Wednesday but then turned around to break towards the 0.73 level. The 0.73 level is of course a significant area that I have been watching for a while, and at this point if we break down below it, it is likely that the market could go much lower. The 0.71 level is an area that has been important more than once, so it would not surprise me at all to see this market reached towards that handle.
AUD/USD Video 17.09.21
On the other hand, if we turned around to show a certain amount of bullish pressure, I would be looking for signs of exhaustion to start selling again. The 50 day EMA is sloping lower, so I think at this point in time it is likely that we would see a lot of selling pressure. The market of course is moving upon the strengthening US dollar, and the fact that China is in trouble all the sudden, which of course has a major influence on what goes on in Australia due to the fact that Australia since most of its major export commodities to the mainland. As we continue to see a lot of questions when it comes to global growth, that will also weigh upon the Australian dollar.
Adding more fuel to the fire is that the retail sales numbers in America came out much stronger than anticipated. In fact, retail sales were supposed to be negative, but the Core Retail Sales number was 1.8%, while the Retail Sales number came out at 0.7% month over month. Obviously, this is a market that is reflecting the US strength overall.
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This article was originally posted on FX Empire