The AUD/USD pair initially fell during the session on Tuesday, but found enough support below the shoot straight up towards the 0.95 handle. The fact that we broke above the 0.9450 level is in itself a positive sign, but the fact is that the 0.95 level is the top of that resistance area. With that, we haven’t broken out yet, but it appears that the market is getting ready to do that.

A daily close above the 0.95 level suggests to me that the market is going to continue to go much higher, probably heading towards the parity level. Don’t be surprised though that if the next couple of days are fairly quiet, as the nonfarm payroll number will certainly have a great influence on the Forex markets as per usual.

Gold markets look a bit healthy as well.

The gold markets look fairly healthy as well, as we are sitting just below the $1330 level. That is the site of the next potential break out to the upside, just as we are sitting just below significant resistance in this pair. Because of that, I feel that this market may go back to the previous correlation that we typically see with the gold markets. If gold breaks out to the upside, the Australian dollar should do well also. This of course were simple directions, so the gold markets find themselves breaking down, the Australian dollar will suffer.

Nonetheless, it does appear that both are ready to go much higher. I think that perhaps the Australian dollar has been oversold over the last year or two, and as a result we should see this market go back to the parity level at the very least, and probably closer to the 1.10 level. This will be especially true if the markets take on a “risk on” attitude again, as the Australian dollar is without a doubt a “risky” asset. When I say risky, I mean that a lot of risky assets are tied to it as it is in fact a commodity currency as most of you know. The next couple of days should be rather important.


Related Articles
  1. Personal Finance

    10 Ways to Protect Your Social Security Number

    Identify theft thrives in part because people must give their Social Security number for so many types of interactions. How can you protect yourself?
  2. Stock Analysis

    Best Stocks to Buy for Around $1 (NXTD, MBII)

    Watch for strong technical indicators and other positive information when considering the purchase of any stock trading in the $1 range.
  3. Mutual Funds & ETFs

    The 4 Best T. Rowe Price Funds for Growth Investors in 2016 (TROW)

    Discover the four best mutual funds administered and managed by T. Rowe Price that specialize in investing in stocks of growth companies.
  4. Mutual Funds & ETFs

    The 3 Best T. Rowe Price Funds for Value Investors in 2016

    Read analyses of the top three T. Rowe Price value funds open to new investors, and learn about their investment objectives and historical performances.
  5. Tax Strategy

    Profit from Art with a Charitable Remainder Trust

    With a CRUT, art collectors can avoid capital gains taxes on the sale of art– while also leaving their favorite charity a legacy.
  6. Active Trading Fundamentals

    4 Stocks With Bullish Head and Shoulders Patterns for 2016 (PG, ETR)

    Discover analyses of the top four stocks with bullish head and shoulders patterns forming in 2016, and learn the prices at which they should be considered.
  7. Economics

    How Negative Interest Rates Work

    Policymakers in Europe go for the unconventional: negative interest. What could happen?
  8. Budgeting

    The Honest Company Bundles Review: Are They Worth It?

    Learn more about The Honest Company and its bundle subscription services, which deliver discounted diapers, formula and other baby products to your doorstep.
  9. Fundamental Analysis

    Will Airlines Keep Flying High in 2016?

    Learn why the airline industry has such a unique set of variable and fixed costs that makes it very difficult to forecast its performance each year.
  10. Investing News

    These Free Super Bowl Ads Happened (BUD)

    The average 30-second Super Bowl cost marketers $5 million in 2016. But these companies benefited from free advertising during and after the game.
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  3. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  4. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  5. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  6. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
Trading Center