The GBP/AUD pair broke higher during the course of the session on Tuesday, as we not only rose but managed to break the top of the shooting star from Monday. With this, it looks like the markets ready to continue going higher, and as a result I am a buyer. I believe the pullbacks will be supported going forward, especially considering the fact that there has been a very obvious trend line that the market has been following to the upside. Granted, the most recent high was lower, but I believe that the Australian dollar continues to suffer at the hands of very soft commodity markets, not to mention the fact that the gold market itself is tight.
It is not until we break below the uptrend line that I would even consider selling this market, so really this point time a pullback should offer value in the British pound as far as I can see. Remember, even though both of these currencies are on the soft side, it comes down to which ones stronger than the other one, and I believe it’s the British pound.
The double parity level
The so-called “double parity” level above at the 2.0 level is my target. I believe that the market will be attracted to that level again, and it’s only a matter of time before we reach it. I think that the market should continue to attract buyers every time it dips because of the fact that the Australian dollar is so out-of-favor. Over in the AUD/USD pair, the market looks as if it could bounce a little bit but quite frankly there is so much in the way of resistance above that I believe it’s only a matter time before the Aussie gets shorted. If we break below the trend line though, I feel at this point in time the market could very easily fall down to the 1.88 level without too many issues.
