The AUD/USD pair rose during the session on Tuesday, breaking well above the top of the Monday shooting star. This isn’t that big of a surprise, as I had anticipated that the 0.93 level would of course be supportive. This action is essentially what I had anticipated, and if you read the article previously, you know that I had set a move above the top of the shooting star from the Monday session that would be a very strong signal.
Now that we've had that move, the question then becomes where we can end up from here. The 0.95 level should end up being rather resistive, and I don't think that it will get broken between now and nonfarm payroll Friday. Because of that, I'm a bit leery to go along at this point, but I certainly would be shorting a market that's obviously well supported.
Watch gold, the nonfarm payroll report, and the 0.95 handle.
Gold markets always have an effect on the Australian dollar, and of course this point in time isn't necessarily going to be any different. Having said that though, it was interesting that the Tuesday session saw gold falling in the Australian dollar gaining. Over longer periods of time though, it does typically hold true that both move in the same direction.
With that being the case, this goal breaks out to the upside the Australian dollar should as well. The nonfarm payroll report will be the main focus as weak though, as it will determine whether or not the Federal Reserve can taper off of quantitative easing. Ironically, if the employment numbers bad of the United States, the Australian dollar could be one of the main beneficiaries as the gold market should go higher.
Another interesting thing to look at as the 0.95 handle. That resistance area should be significant, and a close above the 0.9550 level has us looking very strong at that point, as it would be a break of significant resistance. Quite frankly, I think that if we can get above there we could very easily reach parity over the course of the next couple of months.
