The Australian dollar has broken down significantly during the trading session on Monday, slicing through an uptrend line that is a rather significant. I think if you can break down below that level, the market probably will break down below the 0.76 handle, and that could send the market down to the 0.75 handle. I believe that short-term bounces could be selling opportunities, but I think that if the market were to break out to the upside, we could see the 0.77 level as a major barrier. I believe that if we can break above that level, then the entirety of the negative momentum could give way. However, breaking below this uptrend line is a major sign of weakness, so I’m going to wait until we get a daily close to decide where we go next. This could be the beginning of something significant, but we will have to see as weekly trendlines tend to be a very messy affair.
If we do break down, the 0.75 level would be the first target, and then below there I think that we could go much lower. We simply must rally significantly to show signs of buying again, and if we do I think it would be a very strong sign as it would show a complete reversal of the momentum, and I think that we are showing signs of the next major move. Be patient, the market should show its clear intentions.