The AUD/USD pair initially fell during the session on Tuesday, but found enough support near the 0.9350 level to turn things back around and form a bit of a hammer. The hammer of course suggests that there is buying pressure just below, and this makes sense as we have seen a bit of a “basing” in this general vicinity. With that, I believe that this market is trying to build up enough pressure to break out above the 0.95 level finally, which I actually see as resistance extending all the way down to the 0.9450 level.

Moves like this take a bit of momentum, so the fact that we are taking our time doesn’t surprise me. On top of that, we are in the summer months now, which of course tends to be a little slower than usual. All that being considered, I think this market is doing exactly what you would expect at this point in time.

The gold correlation could work against this pair though.

Gold markets got hit fairly hard over the last couple of sessions, and that of course is doing the Australian dollar no real favors as there is a longer-term correlation between the AUD/USD pair and the gold futures markets. If the gold markets drop down below the $1280 level, things could get really ugly for the Australian dollar, but at this point in time I believe that both of these assets will have a bit of a bounce in the near term.

If we can get above the 0.95 level, I think that this market has a bright future ahead of it. We could grind our way to the parity level, as it is the next major resistance barrier on the longer-term charts, and a level that the Australian dollar was quite comfortable with for some time. After all, it wouldn’t exactly be a real stretch to imagine that the pair could bounce around parity for some time as well. I have no real interest in selling this pair, at least not until we get below the 0.92 level, something that I do not expect to see anytime soon.

AUD/USD

Related Articles
  1. Credit & Loans

    5 Signs a Reverse Mortgage Is a Bad Idea

    Here are the key situations when you should probably pass on this type of home loan.
  2. Stock Analysis

    Fortinet: A Great Play on Cybersecurity

    Discover how a healthy product mix, large-business deal growth and the boom of the cybersecurity industry are all driving Fortinet profits.
  3. Stock Analysis

    2 Catalysts Driving Intrexon to All-Time Highs

    Examine some of the main reasons for Intrexon stock tripling in price between 2014 and 2015, and consider the company's future prospects.
  4. Active Trading Fundamentals

    The Top 5 Impact Investing Firms

    Learn what impact investing is and obtain information on some of the top impact investing firms ranked by total assets under management.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Hong Kong

    Learn about the iShares MSCI Hong Kong fund, which invests in various equities of companies listed on the Hong Kong Stock Exchange.
  6. Mutual Funds & ETFs

    ETF Analysis: Vanguard Small-Cap Growth

    Take a close look at the Vanguard Small-Cap Growth ETF, which focuses on domestic small-cap equities with a fundamental growth strategy.
  7. Credit & Loans

    5 Signs a Reverse Mortgage Is a Good Idea

    If these five criteria describe your situation, a reverse mortgage might be a good idea for you.
  8. Active Trading Fundamentals

    The 4 Biggest Private Equity Firms in London

    Discover information about the largest private equity firms that are headquartered in London, ranked by total assets under management.
  9. Home & Auto

    Understanding Rent-to-Own Contracts

    They can work for you or against you. Here's how to negotiate a fair one.
  10. Investing

    Sergey Brin Biography

    Sergey Brin is an American computer scientist and businessman, who, with Larry Page, co-founded Google, which is among the most profitable internet companies in the world.
RELATED TERMS
  1. Record Date

    The cut-off date established by a company in order to determine ...
  2. Supply

    A fundamental economic concept that describes the total amount ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods ...
  4. Investment Banker

    Someone working at an institution raising capital for companies, ...
  5. Yield To Maturity (YTM)

    The total return anticipated on a bond if the bond is held until ...
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the ...
RELATED FAQS
  1. Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>
  2. Why is my 401(k) not FDIC-Insured?

    401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit ... Read Full Answer >>
  3. Can I use my IRA savings to start my own savings?

    While there is no legal reason why you cannot withdraw funds from your IRA to start a traditional savings account, it is ... Read Full Answer >>
  4. Can creditors garnish my IRA?

    Depending on the state where you live, your IRA may be garnished by a number of creditors. Unlike 401(k) plans or other qualified ... Read Full Answer >>
  5. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  6. How does an IRA grow over time?

    Individual retirement account, or IRA, growth depends on many factors, including what types of investments are included in ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!