By: DailyForex.com
The AUD/USD pair went back and forth during the session on Thursday, as it fell rather significantly and even went as low as 0.94 handle. However, we had a significant bounce also and we tested the 0.9650 level before it was all said and done. That area offered enough resistance to push market back down, but we are closing just below that area for the session. On the four-hour chart, we did form a nice looking shooting star so there is the possibility that the 0.9650 level now offers resistance as it was one support.
The gold markets also rose during the Thursday session, as the US dollar got beat up in general. This of course help the Australian dollar as it typically does, and as a result the correlation holds. However, with the nonfarm payroll number coming out later today, it is foolhardy to take a position ahead of time. We have to see how the markets react to this all-important number before getting involved, otherwise we're just simply gambling at that point.
It's all about the Fed
Going forward, it's going to be the Federal Reserve that determines this pair more than anything else. The Federal Reserve is thought to be thinking of cutting back on quantitative easing, and as such that should drive the value of the Dollar higher. This of course will have a massive effect on this market, as well as the situation that's going on in Asia. China is not to be slowing down, and as the Chinese by so much of the Australians exports, it makes sense that the Aussie dollar will fall as the Chinese struggle.
Looking forward, I think that a break above the 0.98 level might be enough to start buying this pair, but quite frankly that from my base case. I believe that any rally at this point time more than likely will be met with selling, and that should continue the downward plunge that we've seen the Australian dollar go through lately. However, this nonfarm payroll number is one of the most important economic announcements of the year it seems, and as a result we will have to see how the day closes before making any significant trading decisions in my opinion.