(MENAFN- Daily Forex)

• The AUD/USD plunged early during trading on Friday, but it still looks very much like a market that is trying to sort out what to do next.
• I do think you have a situation where buyers will continue to look at this through the prism of a risk on risk off environment.
• Perhaps the consolidation area that we have been in for some time will continue to be a major driver of what happens next.

The 0.6650 level above is a major resistance barrier. The 0.6450 level below is a major support level. If we can break out of that, then I think this is a market that goes probably 200 points in one direction or the other.

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As things stand right now, it is a rather rough environment, but ultimately, I think you've got a situation where if you're a short-term trader , you can take advantage of these pullbacks as potential buying opportunities, and of course the surge is higher as potential selling opportunities. Remember that the Australian dollar is highly influenced by the Chinese economy as well, so pay attention to what's going on with announcements coming out of Beijing. Furthermore, there are other factors to watch in China as well as that economy has been in flux.

The market continues to be one that you need to be very cautious of, but I also recognize that we have a scenario where market participants have basically just treated this as a market that's going nowhere, and that might actually be the case for some time. So, a little bit of range-bound trading setups probably come down the road. Right now, though, we are not near the top nor the bottom of the range, so I'm essentially neutral. That doesn't mean that we can't trade from time to time, just that as long as we are not on what is the extreme edges of the range, I don't feel compelled to place bets in one direction or the other as this market is simply looking for a reason to get moving.

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