The AUD/USD pair struggled a bit in the early part of Friday, but remained in the same consolidation area that we have been in.
The Australian dollar dropped initially on Friday as we continue to see a lot of noisy behavior. Quite frankly, this is a situation where we had the non-farm payroll announcement coming out on Friday, and that, of course, had a major influence on what happened next.
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When you look at this pair, it's clear to me that we are trying to build a base to go to the upside and, it does make a certain amount of sense, even though I don't think that the US dollar is quite dead yet. After all, you have the Reserve Bank of Australia in a unique position where they may actually have to raise rates a couple of times this year, while the Federal Reserve is likely to cut rates at least once, if not twice.
With that being said, I think we continue to look at this as a market that will be more or less a buy on the dip opportunity. The 0.6650 level is support, followed by the 0.66 level.
Buy on the Dip Opportunity
To the upside, the 0.6750 level of course has been a bit of a headache, but if we can get beyond there, then I think the Australian dollar may find itself going all the way to the 0.69 level.
In general, this is a market that has been very choppy for quite some time and just recently had a nice run to the upside. If that is, in fact, going to stick, it's not a huge surprise to think that maybe we have to work off some of the short-term froth in order to find buyers to push it to the upside yet again. With this, I like the idea of taking advantage of value every time I see it, and what I mean by that is every time this market drops, you have to be looking for some type of bounce that you can start to take advantage of and really try to push to the upside.
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