The Australian dollar fell rather hard during the Tuesday session, but continues to find buyers near the 0.7650 region. Because of this, I think we are going to see a lot of noise in the market, especially considering that the gold markets are not helping. The US dollar continues to strengthen on interest rate high expectations, which seem to be rather strong. If we break down below the 0.76 handle, the market should then go down to the 0.75 level next. That is an area that of course will have a significant amount of interest, as it is a large, round, psychologically significant number, and has shown structural support in the past. I recognize that the 0.7750 level above is massive resistance, extending to the 0.78 level after that.
This is an area that had previously been resistive, and offered a bit of support, but now that we have sliced through it, it’s likely that the area will become resistance again. Ultimately, every time we rally from here the market will find sellers. Either way, I have no interest in buying this market until we get a daily close above the 0.78 level, which needs to coincide with gold markets rally in. The markets continue to be noisy, but overall, it’s likely that we are going to continue to see bearish pressure as there are a lot of concerns with risk appetite, and of course the Federal Reserve raising interest rates continues to weigh upon the mind of traders around the world. While little bit unfair, the kiwi dollar has an effect on the Australian dollar in vice versa. The kiwi falls for its own reasons, and him of the sympathy move can be seen on the chart here as well. I am bearish, at least for the time being.
Written by FX Empire