The Australian dollar fell a bit during the day on Thursday, reaching down towards the 0.75 zero level underneath. We bounce from there, but I think overall, we are going to continue to see quite a bit of volatility and negative pressure in the Australian market, as the risk off attitude continues. There are a lot of concerns with the Korean Peninsula currently, and that works against the Australian dollar as it is a proxy for Asia itself in currency markets. I think the given enough time, we will go looking towards the 0.7750 level underneath, which was previously resistive. It has not been retested, so this is a perfect technical move.
I’m continuing to sell short-term rallies that show signs of exhaustion. Once that happens, I believe that adding to an already short position is probably the best way to go. I think that given enough time we will test the 0.7750 level, which could be very bullish and supportive. Because of this, I’m not calling for some type of massive meltdown, I just believe that we are pulling back to a more substantial level underneath, where we can continue to find a bit more support for the longer-term move. After all, the 0.80 level above is important on charts going back decades, so it’s not a surprise that we couldn’t get above it’s the first time. If we could breakout above there, it becomes more of a “buy-and-hold” situation, but I don’t see that happening anytime soon, and we most certainly will have to bring quite a bit of momentum to the market to take advantage of that break out and continue to go even higher. Ultimately, I think that the next couple of sessions will continue to see softness, even if gold rallies as gold is picking up due to fear, not speculation.
Written by FX Empire