The Australian dollar fell initially during the day on Friday, but bounced somewhat significantly as we broke above the 0.79 handle again. Because of this, the market was very likely to continue to be choppy, but I think we may get a bit of a pullback over the next several sessions as the 0.80 level has offered significant resistance. That’s a level that’s resistive on longer-term charts as well, going back decades. Because of this, a pullback is probably necessary in order to build up enough momentum to break out to the upside finally. I believe that short-term rallies are selling opportunities, but somewhere closer to the 0.7850 level should see the beginning of support.
Patience will be necessary
The market will be very difficult, but if you are patient enough, I believe that the market will have plenty of buying opportunities underneath. I think that the market will bounce enough to finally break above the 0.80 level, but it may take several days to do that. Because of this, I prefer to wait for a bounce from lower levels that looks to be sticking. The 0.78 level is an excellent area as well, so either one of those areas on a daily chart showing signs of support could be reason enough to go long. Once we did break above the 0.80 level, I think that the market should then go towards the 0.82 handle longer term. I believe that gold of course has the usual influence, so if it starts to rally I think that the AUD/USD pair will rally right along with it.
Written by FX Empire