The Australian dollar rallied during the trading session on Monday, reaching as high as 0.7675, where we start to see a significant amount of noise. Recently rallied though, and I suspect we are trying to continue the upward momentum that we had seen. On the hourly chart, it looks as if we are trying to pull back a bit, but this should only offer value for traders who are looking at momentum. If we can break above the 0.77 handle, then I think that the market is free to go to the 0.7750 level above, which is the next significant barrier. This market has a lot of noise in its both higher and lower than current pricing, so I think no matter what happens next, the Australian dollar is going to be choppy.
If we were to break down below the 0.7625 handle, I think that the market could fall significantly from there. At that point, I would target the 0.75 level, which of course is major support on longer-term charts. I think that the Australian dollar will continue to be very loud and volatile, but that is more of a reflection on the time of year than anything fundamental with this pair. I think that the noise will be a factor that needs to be addressed, perhaps with smaller trading positions as liquidity is going to start thinning over the next week. Either way though, if we were to break above the 0.78 level, the market would probably skyrocket to the 0.80 level rather quickly. That level is a major fulcrum to both buyers and sellers on longer-term charts.
Written by FX Empire