The Australian dollar initially tried to rally during the day on Tuesday, but found trouble at the 0.7950 or so. The fact that we ran to that level and then fell over, the market should then continue to show bearish pressure. I believe that a pullback from there, suggests that the 0.79 level will get broken to the downside. If we can break down below that level, then I think the market goes down even further. Pay attention to the gold markets, because the Australian dollar is highly influenced by what happens over there. The US dollar continues to strengthen in general, and I believe as long as we continue to see sellers jump back into this market, it’s a bit of a “one-way trade.”
The significance of the 0.80 level
The 0.80 level above is very significant, as it is important on decades long charts. Ultimately, this is a market that continues to bounce around that area, but if we can close above there for any real significant amount of time, the market could go much higher. However, I recognize that the 0.80 level will be very difficult to get above. Given enough time, I believe that we will probably go back down to the 0.7750 level, but it will have bounces from time to time as the volatility continues. I think that the gold markets look soft as well, so it’s likely that we will continue to go to the downside over the next several sessions.
Written by FX Empire