The Australian dollar fell initially on Tuesday, but found enough support just below the 0.78 level to turn things around and rally. Once we did, we then found resistance at the 0.7825 level, as we continue to go back and forth. Ultimately, the market should continue to be difficult to navigate, and of course highly influenced by what’s going on in the precious metals markets. Those markets have been very choppy, so I don’t see how this currency pair will be anything but. Ultimately, this is a market that could go higher, but we need to get above the 0.75 zero level to feel a little bit of relief and comfort in being long in this market. Ultimately, I think that if we break above there, the market then goes to the 0.80 level above. That level has been a massive magnet for price in both directions, going back decades.
I think if we can break above the 0.81 level above, then the market is more of a “buy-and-hold” market. That should send this market to the upside, perhaps reaching towards the 0.90 level over the longer term, and then possibly even parity. However, we could also rollover from here and reach towards the 0.7750 level. That’s an area where we had seen a massive amount of resistance in the past, and the scene from where we had broken out and reach towards the upside. If we were to break down below there, that would wipe out the uptrend in this market completely. That being said, I think if we do drift lower from here, it’s just going to offer more of a buying opportunity. Pay attention to gold, if it rallies, that should help this market as well, and of course don’t forget about the Copper markets either.
Written by FX Empire