- The Australian dollar has been slightly positive during trading on Tuesday as we continue to see an overall upward pressure in this market that traders have been paying close attention to.
- Ultimately, I do think this is a market that will be very cautious about getting overly extended, because we had previously broken to the 0.6850 level, which is an area that was a significant amount of resistance.
On the other hand, it’s very possible that we could get some type of short-term pullback. That pullback could very well end up being a scenario where traders look at it as a potential buying opportunity and a market that has been very strong because of this, you have a situation where the AUD/USD market will probably be very noisy, but I still think that there are plenty of people out there willing to get involved and take advantage of “cheap Australian dollars” as long as things stay the same.
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External Influence on Australian Dollar
There is still plenty of external influence on the Australian dollar that you will need to be aware of, not the least of which would be the commodity market. However, we also have to keep in mind that the Federal Reserve is likely to be loose with its monetary policy, and the Reserve Bank of Australia is more likely than not going to stand pat, at least in the short term. However, if there is a serious problem in the US economy, and almost certainly shows up around the rest of the world as well, and if that’s going to be the case, then the market is likely to look at this through the prism of whether or not risk appetite is going to continue to be strong. If it is not, that could be a negative for the Aussie dollar.
The MACD looks positive, but at the same time, the Stochastic Oscillator is in the overbought range, and has crossed the couple of times. I think this means that we are more likely than not going to continue to see a lot of noisy trading, but I do think that there are multiple support levels underneath that you need to be paying attention to, not the least of which would be the 0.67 region.
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