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Forex pairs in this Article » AUD/USD
By: DailyForex.com

The AUD/USD pair fell hard during the session on Monday, as you can see we continued the negative bias. However, you can see that we haven't exactly fallen apart and we are essentially in the middle of a big consolidation area. Nonetheless, I do see this is a market that is very negative at the moment, and any chance that the Federal Reserve is going to taper off of quantitative easing will absolutely crush this pair.

Remember, Australia is heavily dependent on Asia, which isn't as strong as it once was. That being the case, it's very easy to make an argument for the Australian dollar going lower. On top of that, all you have to do is look at the way it's traded over the last several months, it is been horrible.


AUD/USD Daily Chart Aug 20

0.90

I believe that if we can get a daily close below the 0.90 level, we will eventually head towards the 0.85 handle. It's down there that I would expect to see a ton of support, but until then expect choppy conditions. Why frankly I don't see a case where I would want to buy the Australian dollar, unless of course the Federal Reserve chooses not to taper off of quantitative easing, which would be very dollar negative. Going forward, I think that the 0.93 level would have to be closed above on a daily chart in order to even consider that, which of course would be a bit of a breakout.

If we managed to breakdown at this point in time, I would be willing to watch the gold markets as well as I think that will give you a clue. Gold markets have been doing better lately, but I find it a bit ironic that the Australian dollar has been struggling at the same time. That's not usual, so something has to give relatively soon. At this point in time, I would expect to see both of those markets start to slip and unless of course The Fed throws everything off and does not taper as expected in the short term.


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