The Australian dollar shut higher during the day on Friday, slicing through the 0.7550 level. Having said that, we rallied enough to overextend herself, and then pulled back to find support. That being the case, looks as if the Australian dollar is trying to build up enough momentum to go higher. If the gold markets can continue to rally, wish look very strong, I think that the market should then go to the 0.7625 handle above. Expect short-term pullbacks, but those should be buying opportunities. I believe that the market should continue to see volatility, but I think that there is a certain amount of upward proclivity in this market. I don’t have any interest in shorting, least not until we break down below the 0.75 handle.
Again, pay attention to gold. We have bounced enough during the day on Friday to perhaps build a hammer on the weekly chart, and that of course is a very bullish sign. I believe that the market should continue to go trying to reach towards the $1300 level, and that should coincide with a stronger move in the Australian dollar. We do already know that the Federal Reserve is going to raise interest rates a couple of times, but ultimately it is something that the market already knows. Recently, we had the Australians release a stronger than anticipated GDP number, and that of course is positive for the Aussie dollar. Because of this, the market should continue to be very volatile, but in the end, I still prefer the upside.
Written by FX Empire