The AUD/USD pair had a pretty very session during the Thursday trading day, as we continue to see the 1.05 level is far too resistive to overcome. With this in mind, we also see quite a bit of support below, and as a result are not willing to sell either.
However, having said that we see that the last four days have shown a massive resistance area above, it we think that short-term traders will do quite well in this pair between the 1.05 and 1.03. Currently we are trading between 1.05 and 1.04, and as such every time we get close to 1.05, many of the shorter-term scalpers will be more than willing to step in and start selling.
This chart is a microcosm of the risk sentiment around the world right now. Much of it comes out of the U.S. Congress and their inability to get along, let alone work out some type of fiscal deal. Because of this, headlines will come out randomly, normally during the US session that will move this market violently in one direction or the other.
Looking at the chart, we do see the 1.04 level is a bit of a “middle point” that the market wants to slice through. In a roundabout way, it is the “epicenter” of price at the moment. We feel that the market will eventually return to either the top or the bottom of the larger consolidation zone, which means that we are heading towards 1.06, or 1.02 going forward. Nonetheless, we have to admit that so far this move has been relatively strong and steady, albeit choppy.
We would also have to watch the gold markets in order to see what’s going on with gold exports out of Australia. Remember, the Australian dollar and gold are highly correlated, and as the gold markets starting to pick up steam, the Aussie dollar could as well. On a daily close above the 1.05 level, we would be more than willing to start jumping in with both feet. We do however recognize the fact that 1.06 will more than likely be resistive as well.
Written by FX Empire