The Australian dollar has rallied for the last couple of days, initially forming a hammer at the bottom of the recent trading range on Wednesday. By reaching higher again on Friday after the jobs number, it appears that the market is going to eventually find resistance above though, as the 0.68 level has offered quite a bit of selling pressure. With that in mind, we probably have another range bound trade just waiting to happen and therefore I would anticipate some type of exhaustion just above. Beyond that, we also have the 50 day EMA coming into the picture, so it would make sense that sellers step back in.
Ultimately, there will be some decisions made but with the US and China talking on Wednesday and Thursday, it’s hard to imagine that this market is going to take off like a rocket, unless of course some type of deal is figured out, which seems unlikely this point. There might be a promise to “talk more”, which probably allows for a “fade the rallies” type of situation as well. That being said, to the downside it’s likely that the 0.67 level underneath offer support. If we were to break above the 0.69 level, then the market could be forming a larger “W pattern”, which of course would be very supportive and very bullish. All things been equal though, the Australian dollar continues to suffer at the hands of poor economic figures coming out of Australia, and of course it’s attachment to the Chinese economy which seems to be slowing down at the same time. The one thing that is helping Aussie dollar traders right now though is the gold market, so that is something worth paying attention to. However, it looks like in the short term we should see plenty of selling about 50 pips above.
Ultimately, there will be some decisions made but with the US and China talking on Wednesday and Thursday, it’s hard to imagine that this market is going to take off like a rocket, unless of course some type of deal is figured out, which seems unlikely this point. There might be a promise to “talk more”, which probably allows for a “fade the rallies” type of situation as well. That being said, to the downside it’s likely that the 0.67 level underneath offer support. If we were to break above the 0.69 level, then the market could be forming a larger “W pattern”, which of course would be very supportive and very bullish. All things been equal though, the Australian dollar continues to suffer at the hands of poor economic figures coming out of Australia, and of course it’s attachment to the Chinese economy which seems to be slowing down at the same time. The one thing that is helping Aussie dollar traders right now though is the gold market, so that is something worth paying attention to. However, it looks like in the short term we should see plenty of selling about 50 pips above.