AUD/USD had a fairly quiet session on Monday as traders came back from what has been a relatively calm weekend. With this in mind, the fact that the nonfarm payroll Friday is coming up and the Independence Day holiday in America is on Wednesday, it's not a huge surprise the markets were quiet.
Adding to the mix is the fact that the Bank of England and the ECB both have meetings this week as well. This could have traders staying away from the market currently, and the Australian dollar of course is one of the currencies that they would avoid first. Being so correlated to the risk appetite of traders, this pair could tread water for the short term.
However, it should also be said that the pair didn't selloff either. This in and of itself is a relatively bullish sign, or at least means that the market isn't ready to jump ship right away. This in mind, the technicals seem to be fairly clear in this particular currency pair at the moment.
1.2050
Currently the market is sitting right around the 1.2050 level, an area that is been both support and resistance over the last several months. As the Friday session came to a close, the market slammed into this level and failed to break higher. This was of a surprise considering the ferocity and relatively short amount of time the move was made in.
Keeping that in mind, it is interesting that the pair didn't fall back from the level after this explosive move higher. This leads me to believe that the market "wants" to go higher in the end, but is nervous about all of the potential headline shocks this week. If the employment picture United States is good, this pair should rise overall as traders go into the markets looking for riskier assets. If it doesn't, then this pair will fall.
.jpg "AUDUSD Daily 7312")
At this moment in time, I am treating this candle on Monday as a typical doji. This means that I would buy on a break of the top of Monday's range, as it shows a significant push higher, and sell on a break of the bottom of Monday's range as it would show a pullback coming. However, I would be remiss if I didn't mention the fact that selling this currency pair at this point in time is the riskier of the two propositions. I believe that the parity level will offer support, and as such any short position I take will probably only last a few hours. However, if the market managed to close the daily candle below the parity level, I would become aggressively short again.