The AUD/USD pair fell during the session on Wednesday, and touched lows of the 0.9850 region. However, you can see on the chart that we did bounce enough to form a hammer, and this of course leads me to believe that we could see a bounce in the relatively near term. A break of the top of the hammer is technically a buy signal, but I think that the parity level is about to act as significant resistance, and as a result unless you are a very short-term trader, it's going to be difficult to trade this move.
On the other hand, if we managed to break the bottom of the hammer that formed on Wednesday, this would be an extraordinarily bearish sign. This would more than likely have this market heading down towards the 0.97 handle, an area that is significantly supportive on the longer-term charts.
Commodities are hurting in general
The commodity markets have taken absolute thrashing lately, and of course the Australian dollar has paid for it as well. One of the most notable ones is the gold markets, and the fact that Australia is one of the world's largest exporters of the yellow metal does not help the situation as far as the Aussie dollar is concerned.
That being said, the Reserve Bank of Australia has recently released a statement that suggested further monetary policy movement could be coming, which of course means that easing will be the way to go. If that's the case, the Australian dollar will lose its luster against many of the "safer" currencies around the world, and most importantly to the US dollar.
If that's the case, this pair really should start to break down quite a bit. Nonetheless, I think that a shortterm bounce is coming first, and that selling at a higher level is probably going to be the way to make real money. I don't really see an argument for a higher Australian dollar for any length of time, and of course headlines come out to change everything. Going forward, I believe that selling rallies will be the way to go.
