The AUD/USD pair initially shot higher during the day on Thursday, but found enough resistance above at the 0.9450 area to turn things back around and form a shooting star. The shooting star of course is a very negative sign, and as a result I believe that the market should pullback from here. I don’t necessarily believe that we are going to break down, but breaking below the bottom of the range for the day would have this market looking for value below. With that being the case, I am looking for support below and supportive looking candles in order to get involved. We could however stay within the range that I have marked out on this chart, with the 0.92 level on the bottom, and the 0.9450 level on the top. Either way, buying right now is almost impossible, as I believe that the 0.9450 level should continue to offer resistance, and I also believe that the resistance area probably runs all the way to the 0.95 level as well.

Watch the gold markets.

The gold markets have been doing fairly well over the last 24 hours as well, which of course can move the Australian dollar in and of itself. With that being the case, I feel that the market will follow what happens in the gold markets, but there could be a lot of choppiness just above in both the Australian dollar and the gold markets themselves. Because of this, anticipate a lot of volatility but I do think ultimately that this market will go much higher. The real question is whether or not we can do it now, or later.

One potential hand is the fact that the last pullback reversed almost immediately and never got below the 0.93 handle. That’s normally a sign that the buyers are starting to take over, and quite frankly I’m kind of surprised that we formed a shooting star. Nonetheless, I don’t really want to sell, I would rather look for supportive candles below as I believe that the Australian dollar will continue to gain overall.

AUDUSD 62014

Related Articles
  1. Fundamental Analysis

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
  2. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  3. Investing

    Latin America’s Economic Forecast

    After a ten-year run, the economies of Latin America are in a decline. For sustainable, long-term growth, the region needs structural reforms.
  4. Professionals

    Illiquid Real Estate: Correlation Pros and Cons

    Stock and bond markets are moving more closely in tandem with each other. Is illiquid real estate the vaccine for this correlation?
  5. Professionals

    How to Manage Fixed Income as Interest Rates Rise

    A look at how to manage fixed income amid the specter of rising rates, correlation to stocks, client expectations and more.
  6. Mutual Funds & ETFs

    4 Mutual Funds Warren Buffet Would Buy

    Learn about four mutual funds Warren Buffett would invest and recommend to his trustee, and discover detailed analysis of these mutual funds.
  7. Mutual Funds & ETFs

    Passively Managed Vs. Actively Managed Mutual Funds: Which is Better?

    Learn about the differences between actively and passively managed mutual funds, and for which types of investors each management style is best suited.
  8. Economics

    Why the Euro Failed to Become the World's Reserve Currency

    Examine the current state of the U.S. dollar as the world's reserve currency; learn the major reasons why the euro has failed to replace it in that capacity.
  9. Investing

    The Top Businesses Nurtured By Y Combinator

    We look at the top startups that were incubated at Y Combinator, one of the world's most popular business incubator firms.
  10. Professionals

    Want to Start Up an RIA? Expect These Hurdles

    RIAs looking to strike out on their own need to overcome and plan for a number of hurdles.
  1. Are Cafeteria plans taxable?

    Whether the benefits you receive through your employer-sponsored cafeteria plan are taxable depends entirely on which benefits ... Read Full Answer >>
  2. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>
  3. How do mutual funds compound interest?

    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... Read Full Answer >>
  4. Who decides to print money in Russia?

    The Central Bank of the Russian Federation (CBRF), like its peers in most countries, is the governmental entity responsible ... Read Full Answer >>
  5. Does working capital include prepaid expenses?

    The calculation for working capital includes any prepaid expenses that are due within one year, since such prepaid expenses ... Read Full Answer >>
  6. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>

You May Also Like

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!