The Australian dollar fell initially during the US dollar during the Thursday session, but as you can see we popped in order to close right about the 0.94 handle. That area of course is the beginning of the region of resistance and extends all the way to the 0.95 handle, so I believe that this market might have a little bit of trouble going higher.
Don't get me wrong, I do believe that the 0.95 level will be attempted during the nonfarm payroll announcement if the numbers out of the United States are poor, but in the end the 0.95 level will probably be very resistive, and I feel that this market will more than likely be very volatile but in the end may not be very profitable for the buyers.
On the other hand, I don't see why the sellers should do well either. This is a market that has potential to cause a lot of problems during the session today, so quite frankly I feel that the prudent trader will stay away from it. However, we never really know what happens ahead of time so we have to make some type of contingency plan. If we can get above the 0.9550 level, I feel that the market will breakout to the upside for a significant move towards the parity level.
An exercise in futility perhaps
I have to admit, I am not a big proponent of trading a nonfarm payroll Fridays anyway. However, this particular currency pair at the moment looks like it's fairly tight and well contained. I believe on the downside we have the 0.9250 level as support, and of course the aforementioned 0.95 level as resistance. It would not surprise me at all to see this market go sideways during the session with a fairly wide range.
That would mean a neutral close for the day, which of course will end up frustrating a lot of traders out there. This being the case, I feel that unless we break out to the upside it's almost impossible to trade this market. In fact, it's probably best just to wait until Monday to make some type of decision.
