The AUD/USD pair initially went much higher during the course of the day on Wednesday, reaching all the way to the 0.73 handle. This was predicated mainly upon a better than anticipated GDP number coming out of Australia, which of course is very positive for the currency, but at the end of the day the Australian dollar tends to be sensitive to global risk appetite, and of course Asian growth. This of course is because the Australians supply the Asian was so many of the raw materials, so it makes sense that the 2 economies are highly leveraged towards each other.
The fact that we ended up forming a shooting star of course suggests that there is quite a bit of bearish pressure, and the 0.73 level of course makes a lot of sense as it has previously been supportive and resistive both. Ultimately, we are in a downtrend at the moment so a shooting star forming for the daily candle suggests to me that we are going to continue to go lower. It might be choppy between here and the bottom, but at this point in time it looks as if the rallies will continue to see quite a bit of bearish pressure applied to them, so I do not think that buying is even possible, at least not until we break above the top of the resistance barrier, which is somewhere closer to the 0.74 level.
Gold markets look a little bit soft, but they are sitting on top of significant support, so at this point in time I don’t think that gold will highly motivate the markets to go in one direction or the other. At this point in time, it appears that the bearish pressure is set to continue, and we could drive all the way down to the 0.70 level. If we did break out to the upside though, and above the 0.74 level, the market more than likely will go looking for the 0.75 level above which of course is a large, round, psychologically significant number.