The AUD/USD pair went back and forth during the session on Wednesday, but as you can see it's essentially deciding nothing. Granted, the market did form a little bit of a hammer, but in the end that's not a big surprise considering the leasing too much pressure to the upside. I believe that eventually we will break above the 0.95 handle, which of course would be an excellent buy signal as the market continues to gain strength over time. After all, there is an area right around the 0.9550 area that has clearly offered resistance the last time we got this high, so a clearance of that or at least a daily close in the general vicinity is an extraordinarily strong and bullish signal.
Because of this, I believe that the market is eventually going to take off to the upside, but it does not look like it's going to get much help against the US dollar via the gold markets as per usual. That being the case, although I am taking a look at gold markets daily, I'm not using it as a hand-in-hand type of indicator like I would have done in the past.
Asian demand
Another thing that could help push this currency pair along is demand coming out of Asia. After all, the Australian supply the Asians with quite a bit of their raw materials, so if the Asians can pick up their GDP, is very possible that the Australian dollar will continue to gain strength as a simple function of copper and gold demand coming out of the Asian region. That being the case, I am launching Asian economic numbers in general, just to see if I can find some type of trend.
Going forward, I fully expect this market breakout above the 0.95 level and aim for parity. It's up to parity that we will see a significant amount resistance, so it's likely that the Australian dollar will struggle to get above parity between now and the end of the year, but I definitely think that upward trajectory will continue.
