Australian dollar rallies to start the week

The Australian dollar has pulled back slightly during the trading session on Monday, testing the vital 0.75 handle. The market bounced towards the 0.7550 level as the Americans came on board, and it now looks like we are possibly running into a bit of trouble. If we can break above to make a fresh, new high, the market could go as high as the 0.76 level. However, when I look at the longer-term charts we have most certainly broken down below a major uptrend line, which is just above the 0.76 handle. Because of this, it’s likely that the sellers will return sooner rather than later, and it’s likely that we will get a nice selling opportunity eventually. Pay attention to the interest rates in the United States, they are climbing and that should continue to favor the downside in this pair.

Gold markets of course have a significant amount of influence on the Australian dollar, and they will of course be sensitive to the interest rates in America. If the interest rates continue to rise, that should put upward pressure on the US dollar, which of course will show itself in this pair as well. I believe that the Aussie will continue to show a proclivity to reach towards the 0.75 handle, but I anticipate that we will go even lower. I anticipate that this is a market that will continue to show a favorable attitude towards the greenback over the summer, and therefore reach towards the 0.7350 level.

AUD/USD Video 22.05.18