The Australian dollar initially rally during the day on Tuesday but then found enough resistance near the 0.7625 handle to turn around and drop significantly. However, as I record this market for the Wednesday session, I can see that the buyers are starting to jump into the market near the 0.7590 level. I think as long as we can stay above the 0.7580 level underneath, the market didn’t continue to go higher. The 24-hour exponential moving average of course is offering dynamic support and resistance, and therefore I think that the traders will be interested. Volatility will continue, but the Australian dollar tends to thrive on the gold market, which I think is trying to make a little bit of the stand.
Also, keep in mind that as Asian stock indices go, the Australian dollar tends to go. I also believe that if we see good news coming out of Asia economically, that helps the Australian dollar as the market looks at the Aussie dollar as a proxy for copper, gold, and several other commodities that the Aussie supply to contractors in Asia. I believe that the 0.7550 level underneath will be the “floor” in the market, so as long as we can stay above there I think that the market then reaches us to the upside. Ultimately, this is a market that continues to offer buying opportunities on dips, and that should continue to be the way this works out. The market breaking above the 0.7650 level is a very bullish sign, and then should send the market to the 0.7750 level above which is massively resistive on a longer-term chart. I believe that we continue to see this back and forth action, so short-term traders will continue to love the AUD/USD pair.
Written by FX Empire