The Australian dollar slid down to lower levels during Friday, but it seems as if the Americans are willing to pick up the Aussie near the 0.78 handle, which is the beginning of significant support based upon the previous break out. I think these support extends down to the 0.7750 level, and therefore I think it’s only a matter time before the buyers push anytime we get close to this area. If we were to break down below the 0.7750 level, that would be a significant turn around and could send this market looking towards the 0.75 handle. However, Gold markets are starting to get a little bit of a bed, so it’s likely that we will see the Australian dollar continue to find interest. I think that if we rally from here, we will probably try to reach towards the 0.79 level over the next session or so, and I recognize that the 0.80 level above is a massive area that goes back decades. That is an area that they are going to have to pay a lot of attention to, and if we can break above 0.81, it now becomes a longer-term “buy-and-hold” scenario. Ultimately, I will get dips his value, and have no interest in shorting.
Pay attention to gold, if it clears the 1300 level, it’s likely that we will continue to see buying pressure in the Australian dollar going forward, and especially if we can clear the $1350 level. I think that both markets are trying to break out, and one will almost certainly lead the other so make sure you have both charts in mind when trading the Australian dollar. I believe that the copper markets will also be paid attention to, which had recently been on an absolute tear to the upside.
Written by FX Empire