The Australian dollar started out on Friday rather bullish, but found enough resistance at the 0.7980 level to fall over. This was predicated upon the jobs number in the United States being better than anticipated, so that of course worked in favor the US dollar in the Forex world overall. It also sent gold markets much lower, so this was a bit of a “double whammy” for the Aussie dollar. When it up finding a bit of support near the 0.79 level as one would anticipate, but I think that we probably have more downward pressure to go. When you look at the longer-term charts, it certainly seems as if we are trying to roll over.
The significance of 0.80
The significance of the 0.80 level cannot be overstated in this market as it has been a magnet for prices over the last several decades. The fact that we failed there tells me that we are not ready to go anywhere for a while, and we very well could find the Australian dollar selling off on signs of exhaustion after short-term rallies. A target of 0.7750 below could make a lot of sense as it was the scene of a major breakout a few weeks ago. I think we are starting to see a turnaround in the fortunes of the US dollar, as shown not only against the Australian dollar, but several other currencies around the world. This market looks like we will continue to make “lower highs” on the short-term charts going forward. I have no interest in buying the Australian dollar currently, unless of course we were to somehow break above the 0.8050 level, which looks very unlikely after Friday’s action and of course the previous couple of sessions before.
Written by FX Empire