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Forex pairs in this Article » AUD/USD

The AUD/USD pair fell during the session on Tuesday, as the Australian dollar continues to get hit. However, just as we had seen on Monday, buyers did in fact step in and support the Aussie dollar in the end. It seems that there is a significant amount of support somewhere near the 0.9150 level, and as a result it appears that we are trying to form some type of bounce now.

There are two hammers in a row on the daily chart, and that of course is a very bullish sign. I have no doubt that there are traders out there willing to step in and take advantage of what seems to be an obvious bounce forming. However, looking at the longer-term charts I cannot help but notice that the 0.95 level should continue to be important in this marketplace, and I suspect significant resistance as we try to reach towards it. If that's the case, then why on earth would I be bothered with a short-term move when I can simply give this market a few days and take advantage of the longer-term trend?


The outflow from Asia has just started

I had been doing some reading and listening to various podcasts around the Internet today, and have come across several different signs that money seems to be leaving emerging markets on the whole. Asia of course is a place that has seen hot money flowing into it for several years now. While this doesn't directly affect Australia in the sense that the money wasn't necessarily going there, the truth is that a lot of the Asian economies are buying raw materials from Australia. If the hot money is leaving, I cannot help but think that the Aussie dollar will continue to fall quite significantly.

On top of that, the Australian Prime Minister recently stated that she believed a weaker Aussie was in the country's best interest. With that being the case, I cannot help but think that the Reserve Bank of Australia will be pressured to cut rates fairly soon. Certainly the economic numbers out of Australia have been far from impressive. With that being said, I'm simply waiting on a bit of a bounce in order to sell closer to the 0.95 handle, or perhaps sell a break of the hammer from the Monday session.

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