The Australian dollar broke down a bit during the day on Tuesday, slicing through the 0.79 level to show signs of weakness. Ultimately, I do think that there is some support in this area, so it should give you an idea as to where we should go next. I think that if we can break above the 0.79 level again, it’s likely that we will make a move higher again.
The Australian dollar has broken down a little bit during the trading session on Tuesday, but we are starting to find support as I record this. If we can break above the 0.79 level substantially, I think it will be another attempt to reach the 0.80 level above, which has been very important over the longer-term charts. I think that it will take a lot of momentum to finally break above there again, but I do believe it happens.
Pay attention to gold markets, they tend to move the Australian dollar as well, so I think that the astute trader will be paying attention to both markets. I think that ultimately, both go higher as the US dollar has had its issues lately, not the least of which involve the bond markets selling off. That is not a good sign, and I believe that we will continue to see a lot of momentum.
Even if we break down from here, I believe that the 0.7850 level will be supportive, and then below there the 0.78 handle. Ultimately, I think that the market will eventually rally, so I don’t have any interest in shorting, and I look at breakdowns as potential opportunities to pick up value. I have a longer-term upward bias, not only based upon this chart, but the fact that gold is trying to break out over major levels.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.