The Australian dollar rallied a bit during the trading session on Thursday, reaching towards the 0.77 handle. This is an area that I think is going to be a bit resistive, suggesting that perhaps we could find a bit of trouble. However, I do think that the Australian dollar eventually rallies enough to break above there, reaching towards the 0.7750 level, especially if the stock markets rally, as it gives us an opportunity to take advantage of more of a “risk on” attitude. Ultimately, I believe that gold will have it say as well, but that’s typical. I think that if gold rallies, that might be enough to push the Australian dollar higher as well.
Beyond that, it appears that in early US trading the EUR/USD and the GBP/USD pairs are trying to rally as well, and typically the dollar will move in concert with these 3 currency pairs. I believe that the market will continue to be very choppy, but I suspect that if we can get some type of relaxing of tensions in the financial markets, the Australian dollar might be one of the biggest proponents of positive momentum. I think that the 0.76 level underneath should offer support, as it coincides nicely with an uptrend line on the daily charts, as we have had a massive up trending channel. I believe that the overall attitude of the market is simply one that is trying to catch its breath, but the uptrend is still intact if we can stay above 0.76 level.
Written by FX Empire