The Australian dollar initially tried to rally during the trading session on Wednesday, reaching towards the 0.7625 level where we had seen quite a bit of resistance in the past. The sellers came back, and we exploded to the downside. The 0.7550 level is being tested for support, and I think that it is only a matter of time before a breakdown below there and challenge the 0.75 handle. That’s an area where there is a significant amount of support, so we can break down below there, the market could go much lower, perhaps reaching down to the 0.7350 level next. That’s not to say that it’s easy to do, but I do think that eventually we will break down, unless of course we get the usual boost from the gold markets, which don’t look particularly lively currently.
If gold was to break above the $1300 level, that could change things, but in the meantime, I don’t see much in the way of an opportunity for the market to go much higher. If the market rallies in the short term, I believe it is only a matter of time before the sellers come back in, so look for short-term rallies to start selling exhaustive candle’s as they appear on the hourly chart. I don’t know that we are going to get a big move in the short term, but eventually we will. I think that taking the short-term rallies as an opportunity to short this pair will continue to be the way going forward. I believe the volatility and choppiness will continue to be an issue.
AUD/USD Video 07.12.17
This article was originally posted on FX Empire
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