The AUD/USD pair fell during the session on Wednesday, slamming into the 0.90 level, an area that I have been watching for some time. Because of the psychological aspect of a round number like this, it does not surprise me that it did hold the sellers away, and cause a slight bounce by the end of the session. The real question comes now as to whether or not it can hold the market for any significant length of time.
Australian GDP came out at 0.6%, as opposed to the 0.7% as anticipated. This caused a massive selloff, and we did break the bottom of a significant hammer from the Tuesday session. However, I believe that the 0.90 handle is more important, and therefore I have two schools of thought at this moment in time: we are either going to break down significantly from here, and on a daily close below the 0.90 level, I would be more than willing to sell and hold this market down to the 0.88 handle. However, there's also the possibility that we get a nice supportive candle from here, and that could be a nice buy signal from a bounce that certainly wouldn't be a huge surprise considering how long this market selling off.
Nonfarm payroll, and gold markets.
Nonfarm payroll numbers come out this Friday, and that of course will move anything that has the US dollar attached to it. That being said, you also have to keep in mind that the Australian dollar is highly influenced by the gold markets, which of course will be highly influenced by the US dollar as well. Going forward, we suspect that if the market in the gold can rise, this should lead and push this market much higher.
Of a bounce, I could see this market going as high as 0.9250 without changing the overall complexity of it. After all, it is the significant resistance area that the market has to contend with in order to bring about a longer-term uptrend. I don't see that happening, but a short term. Bounce certainly could happen from here.
