The AUD/USD pair fell during the session on Thursday gain, but as you can see bounced as we got below the 0.96 handle. This area is offering a little bit of support, and as a result we form something along the lines of a hammer. The markets obviously in an uptrend, so it makes sense that we would see buyers stepped then as we got the pullback. That being the case, we are buyers above the break of the highs for the session on Thursday, but until we see that we are bit hesitant to go long. Alternately though, if we did get a pullback to the 0.95 handle, we would be more than willing to buy a supportive candle in that region. This is because we see that area as the “floor” in the market at the moment.
As long as the Federal Reserve is painted into a corner and cannot taper off of quantitative easing, there is going to be a threat of gold appreciation, which of course favors the Australian dollar. That being the case, we feel that this market should continue to go higher over the longer term, and parity is a very likely possibility between now and the end of the year. Quite frankly, we do not see the Federal Reserve tapering off anytime during 2013, so the Australian dollar should be a buy every time we get a chance to do so with any type of value.
As for shorting this market is concerned, we would have to break down below the 0.9250 level, something that does not seem very likely at this moment. That would more than likely coincide with some type of serious concerns with global growth, which of course would hurt all risk assets, the Australian dollar included. It isn’t does time to the US dollar reigned supreme, but we do not think that’s going to happen anytime soon. We think that the global economy is stagnant, but it’s hardly melting down. Because of this, we think the Federal Reserve will be the largest factor in this market going forward.
Written by FX Empire