The Australian dollar initially when higher during the day and then pulled back on Monday as we continue to see volatility. The 0.80 level above should be massive resistance, but if we can break above there I feel that the market then goes looking for even higher levels. I recognize that it is a large number longer-term, as it has been an area of interest for multiple decades going back. I think that the market will ultimately find a reason to break out, mainly due to US dollar weakness as although the RBA has recently shifted its stance, the reality is that the US dollar is the main driver in this pair. It looks as if gold is starting to pick up as well, and that could be bullish also.
I believe that buying dips will continue to be the best way to play this market, and I also recognize that the 0.77 5 level should be supportive. With this in mind, I look for value in a market that I think will offer it from time to time. A break above the 0.80 level sends this market much higher over the longer term and it suddenly becomes more of a “buy-and-hold” situation. The markets will continue to be volatile, but pay attention to gold, because quite frankly it looks like it’s ready to go higher and that should drive the Aussie upwards. Selling isn’t a thought currently, and I don’t think that will be the case anytime soon.
Written by FX Empire