The AUD/USD pair went back and forth during the session on Monday, hugging the 0.9350 level. The area is the beginning of the massive supportive area down to the 0.93 handle. The area has been supportive in the past, and as a result I expect it to be in the future as well. The area should be difficult to get below, and because of this I cannot sell at these low levels. However, if we do close on the daily chart below that area, I wouldn’t hesitate to start selling as it should open the floodgates to the 0.90 level. The area between the two areas is fairly empty from what I can tell, once you clear the gap just under the aforementioned supportive level. The move isn’t what I expect, but is always a possibility.
Federal Reserve
The Federal Reserve will have to keep an eye on the labor markets in the US, but at the moment we are still far from cutting down on the bond buyback program. This drives down the value of the greenback, and as a result this can boost the Aussie dollar if commodity buying picks up as a reaction. This is what I expect, but I would have to see a supportive candle in the region of 0.93, and at that point in time I am looking for a move to the 0.95 level, which I see as resistance.
Gold markets always have an effect on the Aussie dollar as well, so pay attention to them also. The gold markets look a bit weak at the moment, but there are signs of serious support just below current levels. This market should react accordingly, but they don’t always act at the same time. The markets do move together in general, so paying attention to gold is always a good idea.
The market would have to break well above the 0.9550 level on a daily close in order for me to see a longer-term trade set up. Otherwise, be prepared to take profits relatively quick.
