The Australian dollar has broken down during the trading session initially against the US dollar, reaching down to the 0.77 level. The level continues to be important as we have seen over the last several sessions, and I think we are likely to see that the market will find buyers based upon this level. If the gold markets can rally, then typically the Australian dollar will as well. I think that we will probably go looking towards the 0.79 level, and then perhaps the 0.80 level which is the long-term pivot for this market. I think that it will continue to be very choppy, but I think we are going to see this market tried to break out to the upside.
If we were to break down below the 0.7650 level, then I think that the market probably unwinds towards the 0.76 handle, then perhaps the 0.75 level. Remember that this pair has a significant amount of risk appetite built up into it, so I think that the stock market should be watched as well, because if they continue to go higher, I think that the market will by the Australian dollar as well, in a “risk on” move.
Obviously, if we get some type of shock to the system, that will probably send this market lower, because it typically drives money into the US dollar, and away from some of the commodity currencies such as the Aussie.
Written by FX Empire