The Australian dollar has broken above the 0.79 level during trading on Wednesday, clearing a significant barrier. However, as I record this video it looks as if we are pulling back slightly, so we may continue to see a “buy on the dips” attitude out of the market in general. With that in mind, it’s likely that we will need to be very patient with longs, but at this point I don’t have any interest in shorting a market that looks to be very strong. Because of that, I think that adding slowly would probably benefit most traders as the volatility will probably increase.
The 0.80 level above continues to be a major spot on the chart longer-term, and if we were to somehow break above there it would bring in fresh money. In general, follow the gold markets, which have looked strong over the last 24 hours. I think that the market has a significant amount of support to be found at the 0.7850 level on short-term charts, so if we can stay above there I certainly think that the buyers will be emboldened. That being the case, caution is advised but most certainly it looks as if the buyers are trying to make a statement here. Remember, the US dollar will be affected by the lower than anticipated retail sales numbers coming out during the day, which dials back a bit of inflationary concerns and perhaps makes an argument for the Federal Reserve to be a bit more cautious about raising rates than some people previously thought.
Written by FX Empire