The AUD/USD pair has been a stubborn one as of late. The last few weeks have seen the buyers step in, we have a major amount of resistance just above current pricing at the 0.9450 handle, which I believe extends all the way to the 0.95 level. Ultimately, this is a market that is trying as hard as he can to break out to the upside, and I think that is going to happen fairly soon. I would expect this market to be above the 0.95 level during the month of July.
You can clearly see that we have pullback in found the 0.92 level supportive a couple of different times. Because of that, I feel that this market will ultimately break out to the upside, with a potential rest at the 0.9750 handle, which was the site of a pretty significant shooting star back during the month of October.
Gold markets are telling the same story.
The gold markets, which of course the Australian dollar tends to follow in general, are telling essentially the same story. The $1325 level been broken to the upside would open up the market to a potential move to $1400 or so. That’s a very bullish sign, and I think it that we are about to see the old correlation between the Australian dollar and the gold markets come back into play. I believe that a lot of this has to do with the Federal Reserve and the weaker than expected GDP revision numbers out of the United States. I think that’s essentially the “last nail in the coffin” when it comes to whether or not the US dollar can hang on to some of the gains that it’s had over the last year and a half or so. Granted, it’s going to be a different story against certain currencies, but the Australian dollar has just been absolutely pummeled. I don’t even know that it was necessarily called for. I think that we could pullback during the early part of the month of July, but once we are clear the 0.95 level, I fully anticipate this market going to at least parity, and probably higher than that given enough time.
