The AUD/USD pair initially tried to rally during the course of the day on Wednesday, but as you can see turned back around somewhere near the 0.71 handle. By doing so, we did up forming a shooting star which of course is very negative. We are closing near the 0.70 handle, and I now feel that the sellers are going to continue to push this market much lower. Granted, I think the 0.70 level will have some type of a psychological influence on this market, but at the end of the day I think it’s only a matter of time before we break below that barrier. With this, I have two trading opportunities in the AUD/USD pair as far as I can see.
The first thing that I would do is sell rallies as they appear. Looking to short-term charts that failed to hang onto gains would be reason enough to start selling this market as far as I can see. The downward pressure on this pair has been an enormous, and I don’t think it’s going to go away anytime soon.
As far as a breakdown is concerned, I would welcome that insert selling below the 0.70 level as well. Quite frankly, the market should continue to go towards the 0.69 level, which was the most recent low. I think we could break down below there as well given enough time. The market really doesn’t offer a buying opportunity at this point as far as I can see, and quite frankly this is a vicious downtrend that I have absolutely no interest in trying to challenge.
Gold markets are not helping
Gold markets are most certainly not helping the Australian dollar, as it is highly sensitive to what goes on in that market. The gold markets have been somewhat buoyant lately, but they are not taking off to the upside, something that would certainly help the value of the Aussie at this point. Because of this, I don’t think there’s a catalyst for this pair to go higher for any real length of time.
