- I can see that the AUD/USD pair is trying to break out to the upside but has a lot to work through.
- All things being equal, it’s worth noting that we have a downtrend line, which of course is the top of a larger symmetrical triangle.
Looking at this chart, it’s easy to see that we have a lot of noisy behavior, but we also have a lot of liquidity issues over the next couple of days so I think you need to keep in mind that this may not be as big of a deal as it looks. After all, Thursday is Independence Day the United States, and therefore it’s likely that we will continue to see a little bit of hesitation for traders to put a lot of money into the market. Furthermore, the ECB hosted a central bankers expose, and therefore it’s worth noting that this may have been an overreaction to the idea that the Federal Reserve might start to think about at least “thinking about” cutting rates.
In general, this is a market that I think still remain somewhat Range bound, and I am more comfortable shorting the Australian dollar than buying it. However, if we can break above the 0.6750 level, then I would be a buyer at that point. Having said that, I think the next couple of days are going to be crucial, and we need to be very cautious about getting overly excited.
Thursday and Friday
Thursday and Friday will be crucial due to the fact that we have Independence Day in the United States, so liquidity will be very thin at certain parts of the session. Furthermore, we have the Non-Farm Payroll announcement coming out on Friday, that could very well end up being a major issue as well. With this being the case, I think we’ve got to look at this through the prism of a market that might have a rocky couple of days, but then might very well settled back into the previous consolidation area, or perhaps we get some type of major break out that we can follow. I would be very cautious for the next 48 hours.
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