The Australian dollar has tried to rally during the trading session on Monday, but the 0.77 level has offered enough resistance to turn things over and fall towards the 0.7650 level. That’s an area that has been support more than once, so I think we are going to bounce around in this short-term consolidation until we can get some type of momentum. Longer-term, I believe that this market will continue to go higher, reaching towards the 0.7750 level. If the market were to break down below the 0.7650 level, I think we then go looking towards the 0.76 level underneath, which is a major uptrend line going back several months. I think this point, we are simply trying to build up the confidence and necessary momentum to break out to the upside, but I also recognize that things will be very noisy between now and then.
I believe that the market will ultimately go looking towards the 0.81 level again, but it may take several months to get there. Pay attention to the gold markets, because they often will influence the Australian dollar, and where it’s going longer term. I believe that ultimately, we will see the buyers prevail, but I would be very cautious about putting money to work in the meantime, because the volatility is going to be brutal. Once the market proves itself to you, and shows that it agrees with your assessment, then you can add to a larger position. On the longer-term charts, we have a nice up trending channel.
Written by FX Empire