The Australian dollar has been very volatile during the Friday session, initially dipping to a fresh, new low, and then exploding to the upside. I think this market is trying to find some type of a longer-term support, but I don’t know that we have it yet. However, if we were to break above the 0.79 handle I think that could be bullish enough to send this market looking towards the 0.80 level above. There is a large amount of volatility in this market, and even though the gold markets have been rather bullish, that has not translated into a stronger Australian dollar as gold is being bought as a result of fear, not speculation.
Over the last several sessions, we have seen a bit of a downtrend and even could make an argument for downtrend and channel. All things being equal, I believe that the market will probably continue to drop from here, reaching towards the 0.7750 level, the scene of a massive breakout several weeks back. We have not retested that level, so it would make sense to go back down there. In the meantime, I believe that we probably need to sell short-term rallies, that show signs of exhaustion. Regardless, this is going to be very noisy market as you can see, but the market should continue to find plenty of reason to go back and forth as geopolitical concerns continue to weigh upon the markets around the world.
Written by FX Empire