The Australian dollar drifted a slightly lower during the day on Monday, but I believe that there is plenty of support underneath to keep the market afloat. This is especially true close to the 0.78 handle underneath, and that being the case I think that it’s only a matter of time before the buyers return. A supportive candle is reason enough to go long, and I think should send this market towards the 0.0 level below, which has been a significant level in this market going back decades. It will take a certain amount of momentum building to get above there, so I expect that this choppiness will continue, but will be a function of traders trying to take advantage of volatility and of course gold prices. Longer-term, I think that the market will eventually break out to the upside for the longer-term though, but it doesn’t seem likely to happen in the short term. I think that given enough time, the market will finally break out, but that’s probably going to need the gold markets to help.
Pay attention to the Copper markets as well, because they have a massive influence on the Australian dollar, as Australia is a major exporter of copper to Asia. I believe that Asian growth should continue to drive the Aussie dollar higher, so I like these pullbacks as potential value. It’s not until we break down below the 0.7750 level that I would be concerned with the overall uptrend, so patience will be needed but I think we will get a buying opportunity based upon support on the hourly chart. I believe that the 0.7850 level could also be an area where buyers may be interested in, so at this point I think it’s only a matter of time before we reach towards the highs again.
Written by FX Empire