The AUD/USD pair tried to rally a little bit during the session on Friday, but quite frankly failed to impress. After all, we could not hang onto much in the way of gains, it appears now that the market is starting to see a real lack of interest to the upside. Gold markets rallied a bit initially during the session on Friday which of course is strong for the Aussie dollar, but at the end of the day the market couldn’t hang onto gains as gold drifted lower. With this, it of course had a negative effect on the Australian dollar, essentially killing any type of rally that we could have had.
With this being the case, the fact that the trend is so negative, we should see this market continue to go lower. I think that in general commodity currencies are going to be heard, and the Australian dollar is especially sensitive to the situation in Asia. Asian economies aren't exactly humming along very strongly now, so having said that I think Australia will continue to suffer.
Selling all rallies
I continue to sell all rallies in this currency pair until we get well above the 0.75 level, and quite frankly the 0.76 handle as well. With this, I’m looking for resistive candles in order to start selling or breakouts. I don’t expect some type of meltdown in this currency pair, but I do think that we will eventually see the 0.70 level hit. Given enough time, we could see a break down below there but at this point in time that's my longer-term target as this pair has been sold off rather viciously. You have to begin to wonder who’s left to sell this market, but at this point in time there’s really nobody wanting to buy it, and that’s probably the most important factor. With this, I recognize that we will have a lot of volatility but I still think that the negativity will outweigh the positive momentum.
