AUD/USD fell during the session on Thursday, and in fact underperformed its cousin the Kiwi dollar. This suggests that perhaps any “risk off” trades in the currency markets should favor selling the Australian dollar over the Kiwi dollar. This is a relative strength question after all.
It should be mentioned that the 1.01 level did come into support, but the bounce was hardly anything to get excited about. Because of this, we feel a break below the Thursday lows should signal further selling and probably will run into serious support in till we get to the parity level. Below parity, we see a move to 0.97 as the most likely outcome.
Keep in mind when trading the Australian dollar, it will react to headlines. So when you hear bad news coming out of Europe is moving the currency markets, you may want to sell the Australian dollar instead of getting bothered with the Euro. Nonetheless, we feel that eventually over time this pair will fall. As for buying, we simply would not do it in till we get a daily close above the 1.0350 level, which would signify a violation of the top of last week’s shooting star.
Written by FX Empire