The Australian dollar collapsed during the trading session on Friday as interest rates in America climbed due to the jobs number coming out much hotter than anticipated.
The question at this point in time will be whether or not the interest rates in America continue to climb, putting downward pressure on the Australian dollar.
Rallies at this point in time I will be watching very closely with the 0.71 level as a potential resistance. Signs of exhaustion are selling opportunities and therefore I would be more than willing to push the AUD/USD market down to the 0.6950 level.
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On the other hand, if we turn around and break above the 0.72 level, then it opens up the possibility of a move to the 0.7275 level. All things being equal, it's worth noting that the Australian dollar is a little bit different than many other currencies as the Reserve Bank of Australia had raised rates previously.
Ultimately, this is a market that I think will continue to be noisy, but I also recognize that we have a situation where the commodities markets will also have a major influence as the Australian moves being close could cause continued upward pressure on metals and other things that float around the world.
The other problem that Australia may or may not have is energy, so we'll have to see how that plays out. Energy concerns will continue to cause problems in various countries, and in Asia and the Pacific, they're very, very sensitive and vulnerable to this situation.
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