The AUD/USD pair has had a nice resurgence of last week, but as we head into the month of October we are going to have to look at several things going on at the same time. That being the case, we have to look at this market from a technical perspective, and the 0.95 level does seem to be an area that we need to pay attention to. After all, we have formed a shooting star on the weekly candle, and that of course is a very negative sign. This makes sense, there is a ton of resistance all the way up to the 0.9750 handle, and because of that I believe that this market is getting ready to sell off again.
What I find interesting is that while the US dollar was beat up after the announcement that the Federal Reserve would not be tapering off of quantitative easing, a lot of the gains were turned around almost immediately. Because of this, I think that the markets are starting to ask questions as to whether or not there is anything along the lines of economic growth to look forward to. After all, the Australian dollar is very sensitive to that, and as a result commodity markets should bring this currency down from what I am seeing.
0.9750 Leads the Way to Parity
If we can get above the 0.9750 level, I feel that this market will head towards the parity level. It's still a bit early to figure out exactly what's going to happen, but I feel that will be very difficult for this market to actually achieve. To me, I think that the 0.90 level will be like a magnet for price yet again. However, it should be noted that the gold market should be followed as well, and to be honest the way that we have seen the commodity currencies perform of the last several sessions, it leads me to believe that they will all struggle.
The Canadian dollar, the New Zealand dollar, and of course the Australian dollar have all suffered after an initial surge higher. I believe that this pair will head back down towards the 0.90 handle during the month of October.
