The AUD/USD pair tried to rally during the session on Wednesday, but as you can see the 0.95 level offered resistance yet again, forming a shooting star by the time the markets closed. However, this market does sit on top of significant support all the way down to the 0.93 handle, and as a result I don't think that the markets are going to be able to break down too far from here even though the candlestick looks very bearish. Going forward, I think that this will be more about the US dollar than the Australian dollar, simply based upon the fact that the Federal Reserve may or may not be able to taper off of quantitative easing. In the end, I don't think they can based upon poor jobs numbers.
The market may continue to drill down a little bit, but getting below the 0.93 handle is going to be very difficult indeed. When you look at the second half of September, you can see that there was quite a bit of choppiness in this marketplace. That's choppiness should continue to be supportive, and a break below that would be a bit surprising. However, I see a lot of noise even below there. That being the case, I think that the Australian dollar will eventually attract bidders.
Looking for supportive candles, or a break higher.
I'm personally looking for supportive candles below in order to start buying, or break higher as we would clear the top of the shooting star candle from Wednesday, showing a significant break of resistance. That would be more than enough for me to go long and aim for at least the 0.97 level. Above there, I think the next move is probably to the parity level, which does not carry is much significant as it once did. Let's be honest here: Parity has been broken through several times now, and simply will not be as interesting to traders as it once would have been. With that in mind, I think that we will hit parity sooner or later, especially if gold gets a bid.
