The AUD/USD pair rose during the session on Friday, but as you can see still struggles to get above the 0.95 handle. This area is significant resistance, so it doesn't surprise me although we continue to meander just below it. Quite frankly, I think that eventually this market does go higher, but we need to see the 0.9550 print or higher on the daily chart in order to feel significantly confident of the move higher.
Looking at the recent charting no, you can see that several hammers have printed just below the 0.95 level would score signifies to me that there is continuing upward pressure. Granted, the resistance having been so strong won't necessarily give way easily, but when it does I believe that it will be a lot like a beach ball that being held under water in the fact that it will skyrocket higher.
Parity is the next natural place the market heads to
Looking forward, I think that the parity level is the next natural place of this market will try to head. As is especially true if the Federal Reserve cannot taper off of quantitative easing, as that will add a lot of "sugar" to the markets, and as a result the hot money will flow in commodities, gold, and naturally the Australian dollar as it is affected by both. On top of that, there is the natural tendency for the Australian dollar to get money put towards it, simply because of the interest rate differential been so favorable towards the Australian dollar over the US dollar.
Even if this market falls a little bit here, I firmly believe that buyers will step in somewhere close to the 0.94 handle, as it has been supportive over the last two weeks or so. It's obvious to me that we are trying to get above the resistance area, and as a result I think that eventually the market will get its way. After all, the goal being so much in the order of cell orders above, so it's only a matter of time. Having said that though, I am still waiting for the daily close above the 0.9550 level in order to feel comfortable going long and as to not tie up money in a trade that could go sideways for a while.
