The AUD/USD pair broke higher during the day on Friday, but did not break out to a fresh, new high. After all, there is a significant barrier all the way to the 0.80 level as far as I can see, and with that I have no interest in buying this market. I think that anywhere between here and the 0.80 level we are likely to see quite a bit of volatility and resistance, so I would be willing to sell on a resistive candle anywhere in that general vicinity.
I think that the gold markets aren’t necessarily going to be doing the Australian dollar any favors either, and with that I believe that this pair continues to struggle. Ultimately, it is a “sell only” marketplace from what I can see. I don’t necessarily think that we are going to collapse anytime soon, I just think that we are going to continue to consolidate in this general vicinity.
Sideways
I believe that sideways will be the longer-term move in this pair, essentially making it a short-term traders market. That’s okay though, because I believe that the 0.7550 level will offer plenty of support, while the 0.79 level should be massively resistive. Since we are getting close to that area, I am looking for some type of resistant candle in order to start selling again. Again though, I believe that the resistance extends all the way to the 0.8080, so therefore I find it very difficult to imagine buying this pair anytime soon.
If we did manage to break that area though, I think we could go as high as the 0.82 handle. Ultimately though, the Australian dollar is not only influenced by gold markets, but by hard assets in general such as minerals and copper. I believe that it’s only a matter of time before the lack of economic expansion starts to weigh upon the Aussie dollar yet again, sending this pair lower. I do recognize that the 0.75 level below is massively supportive, so it may be a bit of a struggle to get below there.
