The Australian dollar initially tried to rally, but then broke down as the gold markets did as well. Gold markets continue to be very volatile and negative, as interest rate outlook for the central banks around the world seems to be higher rather than lower. The Federal Reserve looks likely to tighten over the next several months, and that being the case I think that gold will continue to see pressure, which of course puts pressure on the Australian dollars well. I believe that the 0.7550 level below should be supportive, but if we can break down below there, the market should then go to the 0.75 level. The 24-hour exponential moving average has been influence on this market as well, and I think that the sellers will come back if we reached towards that area. Quite frankly, the only thing that I think is going to help the Aussie dollar as if gold suddenly turned around.
Interest rates continue to be very important, and therefore if they rise in places like the United States, gold markets will fall. The Australian dollar is a currency that I’m not interested in buying until we break above the 0.7650 level, and even then, I see a significant amount of resistance above. Longer-term, if we break above the 0.7750 level, the market should then reach towards the 0.80 level after that. Nonetheless, I don’t see anything that is showing this market turning around for any real length of time, and therefore I believe that rallies will continue to offer and I selling opportunities, as the US dollar will probably react very hawkish to what’s going on in the Federal Reserve and by extension, the FOMC Meeting Minutes that will be released prior to today’s session.
Written by FX Empire