The Australian dollar initially tried to rally during the day on Thursday, but found resistance at the 0.7640 level. We pulled back from there, and then reached for support below where we did start to see that. The 0.7550 level underneath should continue to be a massive “floor” in this market. The gold markets of course have a massive influence on the Australian dollar as is typical, so if they start to rally, I believe that the Aussie will as well. The market could reach towards the 0.80 level over the longer-term, but I think that there is also a resistance barrier at the 0.7750 level as well. The Australian dollar has been volatile as of late, so don’t be surprised if it continues to be of the next couple of sessions.
I believe in buying dips, because quite frankly we have seen such bullish pressure lately. I believe that the market continues to favor buyers, and I think that most of the people around the world will continue to favor the Australian dollar due to uncertainty, and of course the connection to gold. With this being the case, the market should remain strong if we can stay above the aforementioned 0.7550 level underneath. Ultimately, this is a market that might be choppy, but I still believe that the writing is on the wall and the longer-term move has already been written out. With this being the case, I have no interest in shorting, and that being the case I think that the market is offering a nice opportunity, giving you the chance to add small positions going forward, and hanging on to the larger move that seems to be ready to happen in the near term going forward.
Written by FX Empire