- It's easy to see that the Aussie dollar has been very strong.
- All things being equal, it looks like we are trying to get to the 0.68 level, which is a large, round, psychologically significant figure.
- And that is something that might cause a little bit of a noisy market.
But short term pullbacks I believe will continue to end up being buying opportunities. The 0.67 level underneath is an area that previously had been resistant. And I think at this point it ends up being a bit of a floor. We have recently broken out of a massive symmetrical triangle, and therefore I think at this point in time, it definitely seems like the market wants to go higher.
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Aussie Continues to Be Driven by Commodities
Keep in mind that the Australian dollar is driven by commodities and of course, risk appetite. But this pair is also driven by the fact that the Federal Reserve may be cutting rates rather soon. And if that's going to be the case, it's likely that the Aussie will be one of the main beneficiaries, not only due to the fact that the dollar will be shrinking (AUD/USD pair), but it also should drive commodities higher.
For example, the gold market has been on fire as of late, and it looks to me like it's ready to break out. If we do break out at this point, it's likely that the Aussie will be used as a proxy for gold like it has been in the past. All things being equal, this is a market that I think short term pullbacks continue to attract a lot of attention.
And I believe that the massive flaw in the market is found that the 0.6650 level where the 50 day EMA is also hanging about. In other words, I just don't have any interest in shorting the Australian dollar and the real trade at this point. As far as I'm concerned, it's a fine value and take advantage of it.
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