The AUD/USD pair rallied during the day on Friday, slicing through the 0.79 level. This is a very bullish sign, and I think now that will continue to go much higher, perhaps reaching towards the 0.80 level over the longer term. Pay attention to gold, because if we can clear the $1300 level, that would be a very bullish sign and should put buying pressure in this market. Alternately, the US dollar continues to sell off like it has been, that is probably reason enough for both markets to rally. However, I recognize that the 0.80 level above is massively important on longer-term charts, as the level has caused a lot of noise over the last several decades. Because of this, I think that the market may have to test the 0.80 level several times before we finally break out. Once we do, then it becomes a longer-term “buy-and-hold” situation for the Aussie dollar.
Buying dips
I believe that buying dips will probably the best way to play this market, as we have seen such a nice rally as of late. I would also point out that we have seen support at the 61.8% Fibonacci retracement level from the most recent impulsive move to the upside, so I believe that the buyers are certainly jumping in and looking likely to push this market to the upside. Again, I think the 0.80 level will be very difficult to clear, but given enough time I think we will eventually see that level conquered as the US dollar seems to be on the back foot against most currencies, and the Australian dollar will probably be about the same as many others. As far as selling is concerned, I don’t have any interest in doing so anytime soon.
Written by FX Empire