The AUD/USD pair rose during the session on Tuesday, slamming into the 0.93 handle again. However, this area has been rather resistive lately, so it'll be interesting to see how this market reacts. After all this is the top of the "summer range", and as a result it's likely that there will be plenty of selling in this general vicinity. However, the market has printed a fairly strong looking candle, so I think that until we break well above the 0.93 handle on a daily close, it's going to be very difficult to get bullish of this market.
I would be willing to sell a resistive candle though, simply because it should market return to the consolidation which has a bottom of the 0.89 handle. That of course gives us plenty of room to start selling and pick up profits. On top of that, the Australian dollar has been a fairly weak currency over the last several months, so this would simply be a continuation of what we've seen in the longer-term charts.
Consolidation or accumulation?
The question now is whether or not this is consolidation or accumulation? The difference of course being that accumulation is the beginning of buyers stepping into support market, which is eventually the lead to the breakout of the upside. If that happens, I feel that this market will more than likely head towards the 0.95 handle, as it is the next resistance area. Nonetheless, I am afraid that this market could be very volatile simply because a lot of what's going on is based upon whether or not the Federal Reserve will taper, which of course is still a question.
Gold markets will have to be paid attention to as well, and although they've been relatively healthy lately, they are simply consolidating in the short term. That of course will have an effect on the Australian dollar, and because of that an effect on this pair. Going forward though, I believe that this pair will be one of the more interesting ones to watch based upon what the Federal Reserve does.
