The AUD/USD pair went back and forth during the course of the day on Thursday, as we have broken down below the 0.90 handle. However, there is a significant amount of noise only down to the 0.89 handle, so we haven’t truly broken free of the support that the market has been fighting with. With that being the case, if we can break back above the 0.90 level, I believe that the market could make a serious run towards the 0.91 handle first, and then above there we could go to the 0.92 level and then the 0.94 level.
After all, the Australian dollar has been oversold to say the least. True, the US dollar is preferred against most currencies right now and that’s part of what’s driving this pair, but at the end of the day it has fallen way too far in the short-term.
Neutral candle could be a positive sign.
The neutral candle of course suggests as consolidation continues, this could be positive a house the market has stopped falling so rapidly. The fall that had preceded this consolidation area was a bit overdone, and with that I am looking for a reason to buy the Australian dollar, but I do recognize it may not come against the US dollar. The gold markets have not been much in the way of help as far as the Australian dollar is concerned, as the gold markets have been a bit soft. However, gold markets are at extreme lows, and there is a significant amount of support just below in that contract, so it is possible that we may get some help soon.
Ultimately, I think that the 0.93 level will be targeted in the relative near term, but until then things will be very choppy and back and forth to say the least. If we do break down below the 0.89 level though, we could go as low as 0.8650 given enough time. However, I believe that the buyers are going to make an appearance fairly soon.
