By: DailyForex
The AUD/USD pair fell during the session on Monday, bouncing just above the 1.02 support level yet again. That being the case, it appears that this market is going to continue to grind sideways, as the 1.02 level has been massively supportive. This support has been there for roughly 18 months, and as a result I think that this pair will continue to struggle to get below this area.
Adding further fuel to the fire for the support area is the fact that the hammer on March 4 extend all the way down to the 1.01 handle. The fact that this handle hit that area and then bounced back significantly to the 1.02 level again suggests that there is quite a bit of support below the 1.02 handle, and that the sellers will be free and clear until we break the 1.01 handle at the very least. With that being the case, I certainly don't wish short this pair as it seems to be an exercise in futility at the moment.
The grass isn't always greener on the other side.
However, looking at this chart I'm not a huge fan of going long either. Granted, I do recognize the value of doing so in this general vicinity as we are so close to the massive support area. And that could be done, but it can't be done for a longer-term trade because there is simply too much choppiness in this general vicinity. In order to go along with any type of conviction, we almost have to break above the 1.04 handle, and then aim for the 1.06 handle.
In the meantime, I believe that if you are a short-term trader, you could find value in trading this pair, perhaps trying to gain 30 or 40 pips at a time. Anything beyond that is going to be difficult to trade for, as the uncertainty of this type of environment is not going to help you. In the long run, if you are a short- term trader this could be your pair, however if you are not – it’s probably best avoided.
