The AUD/USD pair initially tried to rally and break above the 0.75 level, but turned around to fall to the 0.7450 level. I think if we can break down below the preceding hammers that had formed half of this week, I think that the market could go much lower. Pay attention to gold, because of a search selling off that might be the pressure we need to see more downward pressure. I have no interest in buying, but we do break above the top of the range for the Thursday session, think it makes sense that we test the bottom of the previous uptrend line which essentially puts the market looking for the 0.76 handle. The gold markets have been rather soft lately, so that could be a possibility, getting selling pressure in that market due to the strengthening US dollar overall, and that of course the Australian dollar falling as a bit of a “knock on effect.”
You also have to pay attention to the emerging markets, which of course the Australian dollar is a great proxy for, especially when it comes to Asia. As the Aussies supply Asia with most of its commodities and hard resources, it makes sense that any slowdown in Asia will be seen in mineral exports from down under. That of course reflects itself in the price of the currency. Also, we have the Federal Reserve that looks likely to raise interest rates at least once, and probably more than that, and that of course brings up the value the US dollar in general. So, in other words, you have a bit of a circle effect at this point. You have the rising US dollar, which leads to a falling gold, that of course leads to the softening Australian dollar, which is being further exacerbated in this particular market because of the fact that the US dollar is involved. So, given enough time, we should continue to see selling pressure and I believe that if you are patient enough you should get the move that you need in order to profit from that.