The Australian dollar initially went sideways during the session on Friday, reaching towards the 0.76 level before pulling back. However, we then found quite a bit of bullish pressure as General Flynn suggested that he was willing to testify against the White House in the Russian probe, and that of course is a driver of people away from the US dollar. Ultimately, I think that pullbacks will be buying opportunities for short-term traders, but as we head into the weekend, I think a lot of people will be concerned about holding onto a position with such a fluid scenario right now. The volatility will continue, and I think gold markets need to rally significantly to drive the Aussie higher for a longer move.
Ultimately, I think the volatility continues, and I think that if we can break above the 0.7650 level, the market will probably go looking towards the 0.7750 level next. Alternately, some type of rollover probably sends this market back down to the 0.7550 level next. There is a lot of noise and trouble just waiting to happen this market, so this is a situation that will be fluid but eventually we should get some type of confirmation given enough time. In the meantime, it’s probably better off to stay on the sidelines as there are easier currency trades to trade currently, and therefore think that given enough time we should get some type of clarity, but until then there’s no point in taking risk in a market that looks very tight in both directions, and seemed to be driven mainly upon news headlines involving things not even involving the Australian dollar.
Written by FX Empire