The AUD/USD pair fell hard during the session on Thursday first, but as you can see found enough support at the 0.90 level to turn things back around and form a hammer. This of course is a very bullish sign, and as a result if we can get above the top of the hammer, I believe that this market will try to reach the highs that we recently saw the 0.9136 level, and then possibly even higher. With that, I am bullish on a break out, and do believe that we are going to head closer to the 0.9250 level over time.
The shape of the candle is basically perfect, so that of course helps too. Nonetheless, the market seems to have made up its mind, and you have to keep in mind that the gold markets have done fairly well with the exception of the last couple of days. Obviously, the Australian dollar does fairly well one gold does as well, so there isn’t possible catalyst to push the market higher.
Continued choppiness and bullishness.
The market has been both bullish and choppy for the last several weeks, and I believe that will continue. Granted, it looks like you can only buying the Australian dollar right now, but at the end of the day you have to be willing to put up with this type of volatility. Expect a lot of pullbacks in order to basically freak you out, but at the end of the day I believe that if you are diligent and have the wherewithal, this market should pay off fairly well. Remember, the positive swap certainly won’t hurt either, which should continue to flood money into Australia as the Australian dollar has been sold off drastically.
On the other and, if we managed to break down below the 0.8880 level, I would feel that the market is broken. However, it appears that the Thursday action did in fact suggests that’s not going to happen anytime soon, and therefore we should continue to go higher given enough time.
