The AUD/USD pair broke down during the course of the session on Friday, but as you can see had a little bit of a bounce near the 0.77 handle. However, the market is most certainly bearish, and as a result I have no interest in buying any type of bounce. With that, I’m looking to sell rallies that show signs of weakness, as I believe the 0.80 level is massively resistive. With that, I am just waiting for resistant candle in order to start shorting the Australian dollar again, as the US dollar is without a doubt the strongest currency in the Forex markets.
With that being the case, I feel that this is a market that cannot be bought under any circumstances, at least not until we get above the 0.83 handle, something that I do not see anytime soon. With that, this is a “sell only” type situation and I believe that the longer-term trend should continue.
0.80 mattered
The 0.80 level mattered, and as a result I think that was a bit of a change in the attitude of this market. Don’t get me wrong, I know that the trend was to the downside, but this was an area that was massively resistive years ago, and as a result the breakout was a huge change in psychological attitudes in this market. Now that we have broken down below there, I believe that the market should continue to drop from here, as the Australian dollar looks to be very soft.
If we rally from here, I believe that any resistive candle between here and the 0.80 level should be a nice selling opportunity. With that being the case, I’m going to be patient but eventually look at this market as one that will offer value in the US dollar. I think that we are heading down to the 0.75 level, which is the next large, round, psychologically significant number. With fact, being patient is exactly what we will need to do in order to master this trend and continue to collect profits to the downside.
