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

The AUD/USD pair initially fell during the session on Friday, but as you can see the 0.90 level offer quite a bit of support, and we formed a nice looking hammer as a result of the bounce. That bounce shows just how important the 0.90 level is to the marketplace, and because of this, I believe that the market is ready to do a little bit of a "dead cat bounce."

Ultimately, I do believe that the 0.9250 level before too resistive for the market to get over, and because of that I think that a resistive candle is a great selling opportunity. After all, the US dollar continues to strengthen because of the prospect of tapering, and the commodity markets that will be affected by that potential. After all, the Australian dollar is very sensitive to the commodity markets, especially gold.

Short-term opportunity to the long side, then continued downturn.

The AUD/USD pair looks like it's ready to go higher, and on a break of the top of the hammer, I believe that this market could come out of the recent consolidation area, and test the 0.9250 level. That level should offer resistance, based upon the cluster that I see in the early part of November. However, if we get above there, the 0.9500 level should offer plenty of resistance as well, because it is such a large round psychologically significant area.

Any type of resistive candle there would have me selling as well, and it is not until the market close above the 0.9500 level until I would be in a buy-and-hold mode. Although I see the buying opportunity in the short term, I really don't think that you be able to hold to the long side for any real length of time until we get above that area, so we have a little bit of a "two speed market." With this in mind, I would buy on a break to the upside, but may choose a smaller position than selling on a nice resistive candle at one of the aforementioned resistance areas.

AUDUSD Daily 12913

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