- During my daily analysis of major currency pairs, the AUD/USD pair stands out, because quite frankly it looks so pathetic.
- This is a market that is simply falling out of bed, and now we find ourselves below the 0.64 level in the middle of the Friday session during North American trading.
- This was exacerbated by the GDP numbers coming in lighter than anticipated this week from Australia, and then of course we have the jobs numbers in America coming out stronger than anticipated.
- While the Non-Farm Payroll announcement was stronger than anticipated, it was only by a little bit, so I think this probably has more to do with the overall idea that the US economy is going to outperform so many others.
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Major Support Below
I believe that there is significant support below, but we have chop through so much in the last couple of months that I think it looks tenuous at best. Due to the size of the candlestick for the trading session on Friday, and the fact that we are closing at the very lows, I think we’ve got a situation where we could very well see the Australian dollar drop all the way down to the 0.6250 level before it is all said and done. This is an area that has been important multiple times in the past, so I will be paying close attention to it if that does in fact end up being the case. If we break down below there, look out below!
Rallies at this point in time will continue to be looked at with suspicion, with the 0.65 level being particularly interesting, so if we get anywhere near there and see signs of exhaustion, I would not hesitate to start shorting this pair again. In fact, I would probably need to see the US dollar struggle against multiple other currencies in order to think about buying this pair, because we would need to see this be a dollar negative move. Quite frankly, there’s nothing out there that would make me bullish on the Australian dollar by itself.
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