During the session on Friday, the Australian dollar fell rather significantly and reached towards the 0.75 level. This of course is a massively supportive number based upon not only the previous support and resistance that we have seen over the last several years, but the fact that it is a large, round, psychologically significant number.
What I found interesting is that most currency pairs didn’t move much during the Friday session, but the Australian dollar of course was a bit of an outlier. The fact that it fell during a session like we had tells me that the Australian dollar will probably continue to go much lower. However, there are a few things that could move the markets, namely the Greek referendum. With fact, any type of “risk off” type of move should send this pair lower.
0.75 matters
The 0.75 level matters to me, and I believe that we break down below there we will accelerate to the downside. A move below there has me selling yet again, but I also recognize that we could find a significant amount of support in this area. Although I think that we probably will continue to go lower, mainly based upon the fact that we closed towards the bottom of the range, there is the possibility that we could find support in this general vicinity. If we do, it’s a chance to perhaps sell at higher levels as I have absolutely no interest in buying the Aussie at this point. In fact, it’s likely that the market will continue to find sellers as high as the 0.82 level, so quite frankly a rally only gets me thinking “value” in the US dollar. I think that the Australian dollar will continue to suffer because of the way gold has been acting. It looks like the gold markets may bounce, which of course could carry over in this market, but gold isn’t going to be making any long-term uptrend moves anytime soon. With that, I remain bearish overall.
