The AUD/USD pair fell during the session on Tuesday, showing that the 0.90 level, and just below that area, is continue to offer resistance. This resistant candle looks like a market waiting to continue falling, but at the end of the day I believe that the real move will probably come in reaction to the nonfarm payroll numbers. After all, that market moving event typically moves gold with some strength, which of course in turn moves the Australian dollar quite a bit.
All things being equal, what I really want to see is some type of resistant candle closer to the 0.90 handle, and if I get that I am more than willing to start selling right away. That resistant candle would be an imitation to continue the downtrend, and I believe that’s ultimately what we will see. However, I recognize that we may not get that “perfect signal”, and therefore will have to find something else along the lines of the 0.88 handle being broken in order to start selling.
A couple of days of quiet action.
I think that is likely the next couple of days in this market will be fairly quiet. That being said, if you are a short-term range trader, you may find this market suited to your trading style. As for myself, I tend to go for a little bit larger moves, so I want to see something on the daily chart. I don’t like this in front of the computer all day, it’s just not the way I trade typically. However, if you do trade that way there is a significant amount of money to be made in this 200 pip range.
I think ultimately the sellers will take over again, and even without the potential range that is being formed, this consolidation could simply be the sellers taking a break as we see quite often. After all, consolidation normally turns into a continuation, given enough time. I don’t see this market been any different unless of course we can close on the daily chart above the 0.92 level. It is not until we get above there that I’m even willing to entertain a long position.
