The Australian dollar initially rally during the trading session on Wednesday, reaching towards the 0.7825 handle. We have fallen since then, and it looks as if we are going to consolidate around the 0.78 handle. I believe that the market should continue to go back and forth in this area, so I think it’s going to be difficult to trade this market for a longer-term though, and I believe that the gold markets will course have its influence as per usual, so pay attention to that market also.
The US dollar has been strengthening due to higher interest rates, and that continues to put pressure on this market. If we can break above the 0.72 5 handle, the market should continue to reach towards the 0.79 handle above. I believe that breaking above there then frees the market to go to the 0.80 level. Alternately, if we break down below the 0.7775 handle, then I think the market goes down to the 0.7750 underneath, and then eventually the 0.77 handle after that. Ultimately, I think the one thing you can count on is a lot of volatility, so it’s only a matter of time before we get impulsivity that will eventually allow this market to move in a significant manner. Until then, I would be on the sidelines and waiting for some type of clarity before I put money to work in this market and would become aggressive once we get a shot in one direction or the other.
Written by FX Empire