The AUD/USD pair fell during the session on Friday, showing that there is continued weakness in the Australian dollar. That being the case, I feel that the market will more than likely go down to the 0.95 level before it's all said and done, where it should find significant amount of support. With that in mind, I am on the sidelines at the moment, but I do recognize the ability of the market to bounce hard from that level as it was such a significant resistance area just a couple of weeks ago.
In fact, this is almost as classic as he gets when it comes the technical analysis, as the "floor becomes the ceiling, and vice versa" over and over. In other words, this area that was such resistance will be support going forward, and because of that I feel that this market will more than likely find quite a bit of buying interest in the general vicinity. That being the case, I would expect to see traders who have missed the move be willing to jump in at the 0.95 handle, and begin to push the pair higher.
The Federal Reserve and its quantitative easing program should continue to weaken the US dollar over time, and of course make the gold markets a little bit more buoyant. If that's the case, then the gold market should propel the Australian dollar higher, as the two markets tend to move in tandem over the longer term.
I fully expect to see commodities and commodity currencies in general rise over time, but there is a little bit of concern as far as global growth out there. In the end though, I do believe the old correlations of a weaker dollar and higher gold will propel the Australian dollar higher over the longer term, and therefore we should see this market make a move towards the parity level, and I will not hesitate to jump into this market with both feet on a supportive candle in the general vicinity of the 0.95 level.