The Australian dollar did almost nothing during the day on Wednesday, as the 0.7650 level is likely the “fair value” for the short-term charts. I think that the markets are going to continue to struggle a bit when it comes to the Australian dollar, because gold isn’t exactly explosive. However, if gold pics oh, that should continue to push the Australian dollar to the upside, where I anticipate seeing quite a bit of resistance near the 0.7750 level. Alternately, if we break down below the 0.76 handle, we will probably test the 0.75 level below. I think that a breakdown below there would be somewhat catastrophic, and send this market down to the 0.7250 level. I believe that the market is going to continue to be very noisy, and directionless. I prefer to trade the New Zealand dollar against the US dollar, because it moves overall in the same direction as the Australian dollar, but the chart seemed to be quite a bit clearer these days.
I think that the next several sessions will probably be difficult to trade the Forex markets in general, including the Australian dollar as the market will suffer from a lack of volume, as traders are worried about Christmas and not so much the Australian dollar. As volume drives up, I suspect that this market is going to become more of a short-term back and forth type of situation. I believe in general, the Australian dollar will remain flat, with a somewhat soft bias over the longer term as well.
Written by FX Empire