The AUD/USD pair tried to rally during the course of the session on Wednesday, but found far too much in the way of resistance at the 0.94 level area, pulling back and forming a shooting star. The shooting star of course suggests that the market could pull back from here, we living the consolidation area that we have been in for some time. With that being the case, if we manage to break down below the bottom of the shooting star, we feel that this market could drop back down to the 0.9250 level again.
However, we do not expect this to be a longer-term move. The area below the 0.9250 level is significantly supportive, and as a result we should find buyers down near that area. In fact, we believe that this could be the range for the rest of the summer, bouncing between the 0.94 level on the time, and the 0.92 level on the bottom. It’s a little early to make that call, but it certainly looks as if it’s going to be possible.
This is especially true when you look at the gold markets, as the market looks essentially dead at the moment, and that there is quite a bit of noise in that market so it appears that the gold markets probably will be going much in the short term. It’s very possible that we are stuck in a range over there as well, and that certainly would give this pair reason to do nothing for a while.
However, if we get above the 0.94 level, that would be a significant breakout in our opinion, and send this market to the 0.95 level. That area of course will be a resistive area as it is a large, round, psychologically significant number. If we get above there, then the Australian dollar will have broken out significantly, and should continue to go much higher over the course of the longer-term. At that point time, we would have to expect the market to go to the parity level given enough time.
