The Australian dollar has been less than impressive during the session on Thursday, as the market looks likely to roll over a bit from here. If you use a little bit of imagination, you can see a bit of a descending triangle on the hourly chart. If we do breakdown, we should then go to roughly 0.75 below, where I would anticipate the buyers will get involved. Alternately, if we can break above the 0.7560 level, I feel that the market will then finally break out to the upside. Obviously, gold has an effect on the Australian dollar as most of you know, and it looks like it is trying to take a little bit of a break currently. Nonetheless, it does look bullish longer-term so therefore I don’t think that the Australian dollars can do fall apart anytime soon. GDP numbers the other day were stronger than anticipated, and that accords helps as well.
Buying on the dips? Be patient.
I believe that if you go to buy on the dips you have to be patient as well. I’m not looking for any type of major or violent move, and that would include any type of bounce off of support. I believe that the market should continue to be choppy with an upward bias, but you may wish to build a position slowly, because quite frankly I feel that the Australian dollar will probably have a lot of noise built into it. Copper markets did rally during the day, and that will help longer-term as well so don’t forget that the Australians provide a lot of base metals to Asia, and that longer-term can have an effect on the longer-term currency exchange rates. At this point, I don’t have any interest in selling.
Written by FX Empire