The Australian dollar went higher in slow-motion during the day initially, but then exploded to the upside as the inflationary numbers of the United States were weaker than anticipated. Because of this, the Australian dollar broke above the 0.78 level, and it now looks as if that area is trying to offer some type of support. Ultimately, this market should continue to go even higher, and I think that the longer-term target is probably the 0.80 level. Pullbacks of this point should continue to find plenty of support, and I believe that the support extends all the way down to at least the 0.7750 level, so I have no interest in shorting this market. If the gold markets continue to find buyers, I think this market continues to go higher.
I believe that buying dips should continue to be the way to play this market, and I believe that adding to your position as it works in favor is the best way to work the Australian dollar, and because of this, I think that the market will be choppy, but certainly positive. If we were to break down below the 0.7725 handle, then I think we could get a much deeper correction in the Aussie dollar.
Written by FX Empire