The AUD/USD pair rose during the day on Tuesday, reaching back above the 0.73 handle again. However, we have the 200 day exponential moving average just above, as it was resistance previously. Because of this, we are not willing to buy this market, because we believe that it is not until we break above there that we can consider buying this market as it is so important for longer-term traders to pay attention to the 200 day moving averages. With this, we are on the sidelines but recognize that we could get a trading signal either via a break above the 200 day exponential moving average or exhaustive candle in this area. Either works for us, as the Australian dollar has seen quite a bit of volatility lately due to the fact that the Reserve Bank of Australia did a bit of a surprise rate cut just recently, and as a result we are trying to figure out what to do with the Australian dollar at the moment.
Keep in mind that the Federal Reserve has been a bit back and forth when it comes to the idea of quantitative easing, as what was once considered to be an almost guaranteed 4 interest-rate hikes during the course of 2016 2 a little less clear as to whether or not will get anymore. Ultimately, it is likely that the volatility will continue to be the main feature of this market, but you will more than likely have to watch gold market, as they of course have quite a bit of an effect on the Australian dollar from time to time, and with that being the case, we will have to watch that market very closely and combine it with any signals that we get in the AUD/USD currency pair. If we do continue to go lower, we will more than likely reach down to the 0.70 level ultimately. A break higher should send this market to the 0.75 level. Regardless, the one thing that you can count on is going to be a lot of choppiness.