The AUD/USD pair had a bullish session during the Tuesday trading hours, but did manage to fail at the 1.05 level again. This is odd as it was an area that caused massive resistance almost 3 weeks ago. This certainly looks like a market that is trying to find the bottom of the up trending channel, and suddenly looks a bit on the vulnerable side. As its cousin the Kiwi dollar acted the same way, we are a bit confused, and certainly more than a bit cautious.
Because of the actions, we are choosing to stay out of this marketplace at this moment in time. The fact that the Australian dollar, New Zealand dollar, and Canadian dollar all sold off while the Euro seem to gain was a bit of a divergence from normal activity. This being said, something doesn’t look quite right and when that happens – it is best to leave it alone.
Written by FX Empire