- The Australian dollar has rallied quite nicely during the trading session here on Monday as the US dollar itself has more or less been on the back foot.
- With that being said, I still see a significant amount of resistance at the 0.67 level.
- The 0.67 level is a large, round, psychologically significant figure that has already shown itself to be resistant to the Aussie gaining.
If we were to break above there, that would obviously be a very bullish sign, but I think at this point in time, the more likely scenario is that if you see some type of exhaustion, it could be a nice shorting opportunity in this market from a short-term perspective.
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Keep in mind that we have Christmas this week, so that, of course, will have a major influence on liquidity and therefore, maybe we just hang out in a very tight range. I've spent many a holiday going back and forth, trading 5 to 10 pips on short-term charts in what would rather look like a market that's doing nothing.
That might be what we're heading towards; we don't know yet, but ultimately, this is a market that I think you need to watch the 0.67 level more than anything else. If we were to break down from here, the 0.6550 level could be significant support, and breaking down below there could open up a move down to the 0.64 level.
Anything below 0.64 would be massive and almost certainly send the US dollar stronger against everything, not just here. But right now, I think we're heading into that sleepy time of year, and we are just hanging out underneath a major ceiling.
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