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AUD/USD Fails to Hold Gains on Tuesday - 21 October 2015

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

During the session on Tuesday, the AUD/USD pair tried to rally again. However, just like it did on Monday we could not hang onto the gains. I believe that we are currently consolidating between the 0.72 level, and the 0.74 level. With this in mind, even though we formed a very negative shooting star yet again, I do not feel that it’s necessarily going to be easy to sell this pair either. I think that the 0.72 level is massively supportive as it was once massively resistive. With this, I feel that today might be a bit soft in this market, but truthfully the easiest trade to take at the moment is simply shorting the market on short-term charts such as the 15 minute interval.

Gold markets are trying to break out to the upside and I think they will eventually. When you look at this chart, you cannot help but notice that there is a “W pattern”, and if it breaks to the upside things could get very bullish for the Australian dollar in short order.

The significance of the 0.75 handle

I believe that there is a significant amount of upward momentum if we can get above the 0.75 handle. In fact, at that point in time I am willing to call a trend change in start buying only. The meantime though, I think it is going to be very volatile and we need to pick up enough momentum to finally break out above there. That is going to be a messy affair and not something that’s going to be easily done. With this, I actually prefer to buy this pair over the longer term, but I recognize over the course of the next several sessions we may have a lot of sideways action in the aforementioned consolidation area.

I have no plans to sell the Australian dollar long-term at the moment as I believe the 0.70 level will turn out to be the absolute bottom.

AUDUSD

Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

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