The Australian dollar has fallen a bit during the trading session on Tuesday, reaching down towards the 0.75 handle. The 0.75 level is of course psychologically important, so it looks like it is a market that will continue to struggle to break down below there. However, if we can break down below the 0.75 level, the market will break down rather significantly. At that point, I would anticipate a move to the 0.7350 level. However, the weekly charts have formed several supportive hammers around this area, so I think it’s good to be difficult to go lower. I think in general what we are looking at is consolidation.
On the upside, the 0.77 level should be massive resistance, as well as the previous uptrend line. That uptrend line is just below that level, so I think that although we could get a bit of a bounce from here, the upside is probably somewhat limited. I think that if we did break above the 0.77 handle, the market would go much higher, perhaps reaching to the 0.80 level after that. However, I think a lot of back-and-forth short-term range bound trading is probably which are going to be looking at over the next several weeks. This will be especially true as geopolitical concerns go back and forth, in the midst of higher interest rates coming out of the United States. That of course helps the dollar, but if gold rallies due to geopolitical concerns, that could help the Australian dollar as well.