The AUD/USD pair rose during the session on Friday, but would be beat back at the 1.05 level. The previous day of course saw a hammer, as did the two before that. With that being said, it looks like this pair is ready to fight back and forth in the near-term and we feel that it is probably best left alone.
One of the biggest problems that we have is that two major forces are working on the Australian dollar pair at the moment. The Federal Reserve has increased its quantitative easing program yet again, and this of course is working against the US dollar. On the other hand, China is slowing down and Australia is highly leveraged to that economy. Because of that, we think that there will be a lot of confusion in this pair going forward, and aren’t necessarily interested in being involved unless we can get above the 1.06 level.
Written by FX Empire