The Australian dollar fell initially during the day on Wednesday, reaching towards the 0.7550 level underneath, finding a significant amount of support. We bounced from there, but then found a significant amount of resistance at the 0.7575 level. Because of this, we rolled right back over, and reached towards that area. It now appears that the 0.7550 level underneath continues to be rather supportive overall, and I believe that as long as we can stay above that level, the Australian dollar will more than likely continue to show signs of strength. On the other side of the coin, we have the Federal Reserve looking to raise interest rates at least once, if not twice in the relative near future. Because of this, the market will probably remain very volatile.
Given enough time, Gold comes into play.
Over the longer-term, gold obviously has a significant amount of influence on the Australian dollar, and because of this it’s likely that if we can gain in that market, the Australian dollar will continue to find buyers. If we do break out to the upside, we will more than likely test the 0.7625 level, and then break above their and go looking for the 0.77 level next, and eventually the 0.7750 level.
Given enough time, we could even go as high as the 0.0 level which is a major level on longer-term charts. I think that we will see a significant amount of volatility, but I believe that the markets will continue to be choppy but positive in a general sense.
Written by FX Empire