The AUD/USD pair went back and forth during the session on Tuesday, bouncing off of the 0.9250 level yet again. This is an area that has been extraordinarily supportive, and as a result it doesn’t surprise us that we continue to hang about. We don’t really have an ability to sell at this level, as the true bottom of the support seems to be at the 0.92 handle. A break below that level of course has is very bearish at this point time, but until that happens we have no interest in selling at all.
On the other hand, a break above the highs from the session on Tuesday will more than likely send this market going to the 0.9350 level first, and then perhaps the 0.95 handle as it is a longer-term target of ours anyway. However, you have to keep in mind that the gold markets fell off the cliff on Tuesday, so the reality is that the Aussie Dolly very well could follow that particular commodity as it tends to do overall.
Looking at this chart, it seems that we could be trying to find a summer range also, it’s very likely that we could pop higher from here, only to find selling at one of the aforementioned levels as we continue to simply consolidate. In fact, quite a few different Forex pairs look like that at the moment, so why with the Australian dollar be any different? With this in mind, I think that the long-term traders will continue to be frustrated, while the short-term traders will happy with this particular type of market. After all, for the short-term trader there will be several trades over and over, and they may find this to be a relatively profitable summer.
All things being equal though, we do believe that this market probably goes higher quickly that goes lower. Ultimately, we can only react to what the market does but we are aware the fact that this is the perfect spot for some type of significant signal to appear. In that particular scenario, we are very patient about taking the next trade.