The AUD/USD pair try to rally during the session on Friday, but gave back most of the gains as the 0.90 level offered the kind of resistance that I suggested it could. The resulting candle is a shooting star, now appears that the downside is most certainly where we will more than likely be able to head. After all, it appears that the sellers are out in full force, and as a result the market should continue to go lower, perhaps as low as 0.88 in the relatively short term.
This will be bolstered by the nonfarm payroll numbers coming out later this week that could suggest whether or not the Federal Reserve begins to taper off again. If they do, that of course will bring up the value the US dollar in general, and bring down the gold markets, a main driver for the Australian dollar. That being the case, we could have a bit of a “perfect storm”, as money flows into the United States in the way from “riskier economies.”
Definite downtrend in this market.
This is a relatively easy call to make, simply because there is such a definite downtrend in this market. Is not until we clear the 0.92 level that I would consider buying this pair, as it has been be up so badly. Granted, there could be the possible bounce from falling so hard, but I think in the end that’s only going to offer a nice selling opportunity. We need to see fundamental changes across the board in order for the Australian dollar to be a currency that people want to own, and right now we just don’t have it. While there is an interest-rate differential, it’s not enough to justify leaving the safety of the US dollar.
Going forward, I think that if we can get below the 0.88 handle, we could hit the 0.85 level with relative ease. With that in mind, that is actually the target that I am aiming for, on that break down and within a couple of weeks. There is a bit of an “air pocket” in my estimation underneath that level, so that move should be simple. Beyond that, any rally that show signs of weakening would be a selling opportunity in my opinion.
