The AUD/USD pair rose during the session on Thursday, breaking well above the 0.9250 handle and busting through a relatively significant amount of resistance. Now that we have this impulsive candle, we finally have the signal that we been looking for in order to make a decision on the Australian dollar. With that being said, we obviously have bullish pressure below, and the market should continue to go higher at this point. On top of that, we think that the previous consolidation area should be respected still, meaning that we should go to the 0.94 level at one point in time.
With that being said, a break down below the 0.92 level of course is very bearish, but it’s not something that we anticipate seen at this point in time. After all, the gold markets are finding a lot of support just below, and that often will push the Australian dollar in one direction or the other. On top of that, the area below has a very impulsive move below it, so it’s going to be very difficult for the area to be broken down.
On the other hand, if we break the top of the range for the Thursday session, there really isn’t a whole lot beyond the 0.94 level that is standing in our way of going higher. With that, we are bullish of the Australian dollar, but recognize that short-term charts could be a bit choppy as the market continues to consolidate overall. That being the case though, we also have to keep in mind that we are heading towards the summer months, which of course will mean a lot less trading by larger firms. With that, it’s very easy to simply sit on the sidelines and let the markets come to certain areas that we are looking at, which is essentially what we have done here at the 0.92 handle. That was an area where we expect to see a lot of support, and that’s exactly what we ended up getting. This green candle confirms that the market prefers to be at higher levels.