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The AUD/USD pair had a fairly quiet session on Monday, but did manage to bounce back off of the 1.02 level yet again. This suggests to us that this area is going to put up quite a bit of a fight, and now we need to look into the idea of whether or not this pair is actually going to break down. There is also the possibility that we could bounce from this level and return to the top of the consolidation area, which of course is the 1.06 level.
The Australian dollar of course is highly correlated with risk appetite, and as such we think it will be certain that headlines will come into play in this currency pair. The fact that we have gone sideways for so long suggests that there are plenty of people willing to try and push this market higher. With this in mind, we are looking to sell new lows but suspect it only moves down for a short period of time. On the other hand, if we managed to close above the 1.03 level on the daily chart, we would become very bullish.