The AUD/USD pair had a very negative session on Thursday, as we sliced through the 0.74 level, but then bounced enough to go towards the 0.7420 level. At that area, the market then fell significantly and broke to a fresh, new low. It looks as if the Australian dollar is falling apart a bit, and as a result I think it is very vulnerable to downside pressure as today is the jobs number. If the jobs number is highly favorable for the US dollar, it should send this market down towards the 0.73 handle without much effort. Alternately, if we get a move to the upside I would be interested in buying this market if we can somehow break above the 0.7475 handle. I don’t suspect that’s going to happen though, because it appears that the market has already decided which direction it wants to be pushing.
I believe that the 0.73 reason will be the target, and the rallies going forward should be nice selling opportunities. I also recognize that the rest of the market knows this, so it makes quite a bit of sense to simply follow that move. The Australian dollar seems to be struggling mightily, as a continues to underperform the New Zealand dollar as well. Because of this, I think that the Australian dollar will continue to be picked on by currency traders and trying to buy this currency at these low levels based upon value is a very dangerous game to say the least. Short-term selloffs will continue to be the theme in this pair, and there’s no reason to think that you should try to work against this type of move. If the 0.7 3 Region Gives Way, this market falls apart quite rapidly.
Written by FX Empire