The Australian dollar initially fell during the day on Thursday, but turned around to reach towards the 0.7975 level. By doing so, we end up forming a very bullish looking candle, as it appears that we are going to press the 0.80 level above. A break above there would be significant, as the 0.80 level is massively important on longer-term charts, and a break above there could send this market much higher. Pay attention to gold, because it course has a knock-on effect in this market, but it looks currently as if the Australian dollar is going to be supported at the 0.79 handle, and that we may grind back and forth to build enough pressure to break out to the upside. Because of this, I believe that the market should continue to be choppy, but I recognize that the uptrend certainly seems to be what most traders are following, and with go looking bullish, I believe that it is only a matter of time before we go to the upside.
Buying short-term dips
I believe that buying short-term dips is probably going to be the best way to trade this market, because eventually we will get the break out that is so desperately needed. Once we do, I believe that the market becomes more of a “buy-and-hold” situation. The next target after the 0.80 level would be the 0.82 handle, which could be reached rather rapidly as this would be recognized as a massive breakout to the upside. If we did breakdown, I think the 0.7750 level will be tested for support, as it was a massive resistance barrier previously. Ultimately, I still believe in the upside, so I am much more confident in going long in shorting as we have seen so much bullish pressure over the last several weeks.
Written by FX Empire