The Australian dollar has rallied rather significantly against the US dollar during trading on Friday, slicing above the 0.74 level. Because of this, I think that we are going to continue to see some upward pressure in this market, as we have formed a “W pattern” on the hourly chart, which of course is very bullish. However, the market seems to have a bit of a ceiling above, so although I see a buying opportunity, it is probably short term.
The Australian dollar has rallied significantly during the trading session on Friday, confirming a “W pattern” on the hourly chart. When measured, it suggests that we will probably go to the 0.7475 handle, and I certainly think that the 0.75 level above is going to be resistance as well. At this point, I think that the sellers will become a bit aggressive in that area, especially considering that the other risk appetite markets seem to be struggling a bit against the US dollar. The Australian dollar is showing more resiliency than many other currencies, so it’ll be interesting to see how far this can run.
I believe that the 0.7350 level is massive support, based upon weekly charts. It’s not a huge surprise to me that we got a nice bounce from here, because if nothing else it is a technical bounce. But I also expect that the 0.75 level is going to attract a lot of attention, so at the first signs of exhaustion near that level, I would be a seller. Alternately, if we can break above that handle, that would be a very bullish sign and could bring in a flood of new buyers. Overall, I think short-term buyers will run the show, but eventually bearishness will return.
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.