The AUD/USD pair initially fell during the course of the session on Tuesday, but found enough support to turn things back around to climb much higher. By doing so, we reach towards the 0.7450 level, which of course is a harbinger for the 0.75 level which we find as so much more resistive. On top of that, the 0.75 level extends all the way to the 0.76 level as far as resistance is concerned. With that, I believe that this market will continue to go lower, but we are simply getting a “relief rally” at the moment.
I think that it’s only a matter of time before the sellers step back in this market, and as a result I am looking for a resistive candle in order to get involved. The US dollar got beat up significantly during the session on Tuesday in general, but ultimately the Australian dollar is still very susceptible to problems with Asian economies, which we can find plenty of.
Selling rallies
Simply put, I am selling rallies given enough time. I think that this market will continue to break down a bit, but quite frankly the Australian dollar, and the New Zealand dollar for that matter, both have been oversold for a while now. I think that gold markets will have to be watched of course, as gold tends to influence what happens in the Australian dollar, and that market of course is very bearish at the moment. I do not want to own either the Australian dollar or the gold markets at the moment.
I do believe that eventually we get enough support in the gold market to turn things back around for the Australian dollar, but we do not have it quite yet. It will take a bit of volatility and back and forth type of action in order to build up enough pressure to the upside in order to go long. With this, I believe that short-term selling opportunities will present themselves in the form of exhaustive candles, but I am not married to the position when I short this pair.
