The Australian dollar has fallen a bit during the beginning of the week, as Monday was a bit pro-US dollar. I think that the Australian dollar will continue to be noisy, but it also looks as if we are finding a bit of support in the general area. I think that if we can break above the 0.7850 level, it’s likely that we will bounce towards the 0.79 level again. I do like the longer-term outlook for the Australian dollar, because I believe that the US dollar will continue to sell off for much of the year. However, it’s obvious that we have a significant fight on our hands, and I believe that we will continue to see a lot of this choppiness.
I think that the 0.80 level above is a bit of a magnet for price, so it makes sense that it’s going to favor this market reaching towards that area. Overall, I believe in a “buy on the dips” attitude in this market, but I also recognize that most of the trading will be from a short-term perspective as there is so much noise above, so it makes sense that we will get several opportunities to get involved. I think that the 0.78 level will be the “floor” in the market short-term, and ultimately, I believe that we are trying to build up the necessary momentum to break out to the upside and continue a longer-term rally. This isn’t to say that it will be easy, but I do believe in the longer-term efficacy of an Australian dollar rally.
Written by FX Empire