The AUD/USD pair initially fell during the course of the session on Monday, but did find a little bit of support near the 0.7350 level. At this point in time we bounced enough to form a hammer of sorts, which means that there are buyers. I believe that we will eventually bounce towards the 0.75 level, where I would anticipate seeing quite a bit of resistance. Ultimately, the market should find plenty of sellers near the aforementioned 0.75 level. Ultimately, the market should continue to consolidate with a downward bias overall, but at this point in time it seems as if the gold markets may rally, and that of course could have an influence on this pair.
As the gold markets rally, that should put upward pressure on the Australian dollar in general, and as a result I believe that this market might have a little bit of a short-term pop to it. However, I don’t have any interest in buying this market, I believe that being patient will be the way to go going forward.
Selling rallies that show exhaustion
For me, I believe that you to simply wait until a rally show some form of exhaustion in order to start selling. I believe that we will reach back down towards the 0.7250 level, and then eventually lower than that, probably heading to the 0.70 level. I don’t think there were going to get any type of meltdown, just that the lower grind should continue. Ultimately, you have to keep in mind that not only as Australia is very sensitive to the price of gold, it is sensitive to the price of commodities in general.
With that being said, we also have quite a bit of negative news coming out of Asia as the Chinese are slowing down a bit. Ultimately, I believe that this market continues to drop from here, or at the very least struggle to continue to go higher. At this point, I don’t have a scenario in which we are buying this pair.
