By: DailyForex.com
AUD/USD had a stellar session on Friday as the jobs number got the "risk on" party started. Truth be known, the European markets actually look relatively healthy for the session ahead of that important economic announcement anyway. Once the Americans came out with good economic news, risk assets were bought across the board.
The chart looks very strong, and it should be said that the 1.05 level has finally been taken out on a daily close. This of course is very bullish, but I do see some potential for resistance ahead. This isn't based upon anything I have against the Australian dollar, quite the contrary as I believe it is one of the strongest currencies in the world right now. Rather, it is what I see from a technical standpoint that makes me believe this pair will be pulling back fairly soon.
Healthy markets pullback every once in a while
One of the main reasons I see a pullback coming is the fact that the Friday session did not manage to close above the top of the shooting star from Thursday. While we certainly had a strong finish ahead, the fact that we did not clear that level is somewhat concerning. Granted, when I say concerning aiming for the very short-term. Let's be less about this pair, it looks very strong overall.
What I do see however, is a massive up trending channel that looks like we are heading the top of right now. Coincidently, the bottom of the up trending channel is right about where this pair would fall to find a massive support below: the 1.03 level. It is because of that analysis that I like this pair overall, but I think a pullback is coming. Would I sell it? Of course not, as it has been too strong to short at this point in time. Rather, I see an opportunity to be very patient and wait for a couple of days in order to buy this currency pair as it continues to climb much higher. I am especially interested in supportive candles near the 1.03 level or the bottom of the channel.
Of course, if we manage to break the top of the Thursday shooting star this would suggest a breakout of the channel and an acceleration of the bullish momentum. At that point in time, I have to go long as well. You should take notice of the fact that I had absolutely no plans to sell this currency pair, as it simply seems like a good way to lose money.