We will see a lot of choppy and sideways behavior, meaning that you should probably be looking more or less at a range-bound type of trade.

• The AUD/USD currency pair pulled back a bit Tuesday to test the 0.70 level. 
• It should be noted that the 0.70 level has been important multiple times in the past, so it does make quite a bit of sense that the market would stall here.
• The question now is where we go from here, as this was the scene of a rather significant breakout.

The 0.70 level of course has a lot of psychology attached to it, so in and of itself is reason enough to think there might be some trouble. If we break down below the bottom of the candlestick for the trading session on Tuesday, then it’s likely that we go lower, perhaps reaching the 50-Day EMA. The 50-Day EMA is closer to the 0.6925 level, and of course, we have seen support at the 0.69 level previously. In other words, there is a lot of noise underneath that could come into the picture and keep the market somewhat elevated.

Tied to the US Dollar

At this point, it’s probably worth noting that the Australian dollar has fared better against the US dollar than many other currencies, so if we are going to see the US dollar selloff, it’s likely that we will see it get turned around here first. The market breaking above the 200 Day EMA above would be a very bullish sign, perhaps kicking off a new bullish trend.

We will have to be very cautious about that though because the Australian dollar is highly levered to China, which seems to have a lot of its own problems right now. Furthermore, we also have to worry about risk appetite in general, because the US dollar could pick up a bit of a bid if people start freaking out. I think more than anything else, we will see a lot of choppy and sideways behavior, meaning that you should probably be looking more or less at a range-bound type of trade. In the next 24 hours, it does look like we are going to deal with a little bit of support that could cause his market to bounce, albeit ever so slightly. This is a market that continues to see a lot of crosscurrents, but you can probably say that about almost every currency pair at the moment. Pay attention to the 10-year yield in America, because if it starts to rise again, that could send the Aussie lower.

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I think more likely than not, we will continue to see a lot of pressure from the upside as sellers will continue to be involved.

The Stellar market has fallen ever so slightly during the trading session on Wednesday, as we continue to hang about the $0.20 level. The 50 Day EMA is sitting just above and is dipping ever so slightly lower. This suggests that perhaps we will continue to see a little bit of downward pressure. The market has been going back and forth around the $0.20 level for a moment, so it looks like we are trying to figure out where our next move is.

If we were to turn around a break above the 50 Day EMA, the market could go looking to take out the $0.23 level. Breaking above that opens up the possibility of a much bigger move, perhaps reaching the 200 Day EMA. The 200 Day EMA is sitting at the $0.26 level. All things being equal, this is a market that I think sees plenty of resistance above, but it is worth noting that we bounced from a higher level this pastime, so it does suggest that perhaps we are going to see potential momentum come back into the picture.

If we break down below the short-term bounce at the $0.1871 level, then it is likely that we could go to reach the $0.71 level. This area has been important multiple times, so as long as we can stay above the $0.17 level, Stellar has an opportunity to stay somewhat afloat. If we do break down below there, is likely that Stellar will go looking to the $0.15 level, perhaps even further than that. I think more likely than not, we will continue to see a lot of pressure from the upside as sellers will continue to be involved.

The market will continue to be very choppy, so you need to be very cautious about your overall position exposure, and you should pay close attention to the larger markets as the Bitcoin and Ethereum markets tend to have a large effect on what happens, and therefore you need to see momentum in those markets to see the smaller coins such as Stellar takeoff. If they start to sell off quite drastically, Stellar will as well. In the short term, I think it is more or less going to be choppy and sideways, therefore a little bit of patience is going to be necessary going forward.

I would assume any rally will be sold into on the first signs of trouble.

The euro fell a bit on Friday in very thin trading. After all, it was Good Friday, and it makes quite a bit of sense that we would see very little in the way of movement. We are sitting at the 1.08 level, an area that has been very supportive previously. The 1.08 level has a lot of noise underneath that extends down to the 1.06 handle.

The area underneath is going to be very noisy, so even though I think the market falls rather slowly if we do get a breakdown. At this point, the market is likely to have more of a grind than anything else, continuing the overall downtrend. Any bounce from here would be a potential selling opportunity on signs of exhaustion. Furthermore, the 1.0933 level is an area that could offer a little bit of resistance, but even if we break above there then we would have to deal with the 50-day EMA. The 50-day EMA sloping lower offers a dynamic resistance barrier as well.

Keep in mind that the interest rate differential continues to be a major issue, as the US rates continue to be much higher than European ones, thereby making the US dollar much more attractive. Beyond that, there is also the safety play of owning the US dollar, and there are certainly quite a few problems around the world that could continue to drive money into it. After all, Europe is the epicenter of a lot of these problems, including the war in Ukraine. Furthermore, the inflationary problem in the European Union continues to be a major problem, and there is a lot of concern when it comes to growth.

If we were to turn around and start rallying, I would assume that there would be a major shift in the global appetite. After all, the market has been falling for quite some time, but if we were to turn around and break above the 1.112 level, then I would have to rethink the entire situation. At that point, something would have changed quite drastically, and it will have shown a major turn of events. I do not see that happening anytime soon, so I would assume any rally will be sold into on the first signs of trouble.

The market continues to look as if it is trying to recover, but that does typically take a lot of volatility and choppy behavior.

Bitcoin initially fell a bit on Friday to test the 50-day EMA, only to turn around and show signs of life. Ultimately, the market looks as if it is trying to recover, after a nice pullback. The pullback in Bitcoin does give us an opportunity to pick up a bit of value, assuming that we break out to the upside. If we can break above the 200-day EMA, then it would show momentum to the upside.

Alternatively, if we were to break down below the bottom of the hammer that formed for the session, it is possible that we could break down to test the $40,000 level. The $40,000 level is an area that has been important multiple times, so it will attract a certain amount of attention. I would anticipate buyers to show up there as well, and giving back the $40,000 level could end up being a relatively negative turn of events, perhaps reaching as low as the $35,000 level.

Bitcoin went back and forth over the last couple of days, and that does suggest that perhaps we are going to continue seeing a lot of volatility. It is difficult to imagine a scenario in which trading is going to be easy. Nonetheless, if we can break above that 200-day EMA, is likely that the $48,000 level will be tested, and then possibly even the $50,000 level.

Even if you do not trade Bitcoin, if you are a trader of crypto, all you need is to follow this market because it does have a major influence on what happens with the rest of the coins out there. The market continues to look as if it is trying to recover, but that does typically take a lot of volatility and choppy behavior, meaning that we need to respect position size, and of course leverage if you have access to it. Longer term, a move above the $51,000 level after recovery could open up more of a “buy-and-hold” type of situation. Keep the risk profile in the back of your head as well, because the Bitcoin market is far out on the risk spectrum, meaning people will need to feel comfortable taking risk in order to push this market higher.