The AUD/USD pair rose above the 0.95 handle during the session on Thursday, but as you can see found enough resistance above that large figure in order to push the market back down and form a shooting star. Unfortunately, the shooting star sits right on top of a massive amount of support, so therefore we are not sellers of the Australian dollar. The gold markets took a beating during the session, and that might’ve been part of would cause this move. Nonetheless, we still think that a break above the top of the shooting star the daily close is more than enough reason to start buying the Australian dollar, and we fully expect to see that sooner or later. Selling is not possible until we get below the 0.9250 handle, which looks very unlikely at this point.
Keep an eye on the Asian markets, if they do fairly well it’s typically good for the Australian dollar as the Australians will export raw materials to places like Indonesia, Vietnam, and of course China. It is a play on growth in general when you buy the Australian dollar, not to mention the fact that it is so heavily influenced by those Asian economies. Going forward, we still think that this market could very easily find the parity level, but we need to have a little bit of a catalyst in order to see that happen. Right now we feel the markets are basically in a holding pattern, and that’s why we’re not really seeing too much conviction in one direction or the other. Because of that the markets will more than likely chop around in this general vicinity, but eventually find their footing yet again. That move is what we are anticipating, but we need to see some type of supportive candle in order to go ahead and start buying.
Quite honestly, we believe that this market may be a bit stagnant between now and the nonfarm payroll numbers coming out next week, so although we know the direction we want to trade the Australian dollar, we need to be patient at the moment.
Written by FX Empire