The Australian dollar shut higher initially during the day on Friday, but then pulled back to test the opening again, only to rally and reach towards the 0.7625 handle. We found a bit of resistance there, so a pullback could be coming. I think a pullback offers us a nice buying opportunity and the Australian dollar though, because quite frankly it looks very healthy on the weekly chart and it seems as if we’re going to reach towards the 0.7750 level. I think that the 0.7550 level underneath will continue to be essentially a “floor” in this market, and therefore we should continue to see plenty of buying pressure going forward. Remember that there is a certain amount of risk appetite influence in this market, and this being the case it’s likely that the markets will be paying special attention to stock markets, precious metals, and futures markets in general. If they go higher, and makes sense of the Australian dollar will also continue to strengthen.
If we can break above the top of the range for the past week, I believe that this market is ready to continue going higher, and that you can add every time we dip as the range that extends all the way to the 0.7750 level is so firmly established on the weekly chart. I have no interest in selling into we break down below the 0.755 level, which does look very likely to happen so therefore I remain a “buy only” type of trader.
Written by FX Empire