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MENAFN- Daily Forex)
During my daily analysis of the major currency pairs, the AUD/USD pair is one that has caught my attention as we are hanging around the 0.62 level. The 0.62 level is an area that's been important multiple times, so I think you should pay close attention to what goes on here. All things being equal, looks like a market that is going to be very noisy and choppy, and of course the fact that the area previously had been important multiple times over the longer term.
Technical Analysis
The technical analysis for the Australian dollar obviously is very negative, and therefore I think you have to be looking for selling opportunities, and the fact that we ended up forming a bit of a hammer during the day on Friday suggest that perhaps we may get the bounce that is necessary to finally get that trading opportunity. The 0.6350 level is an area that a lot of people will be paying close attention to, as it was previous support and now it should at least be a significant amount of resistance based on“market memory.”
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All things being equal, this is a market that I think continues to be noisy, but what I am looking for is a day or possibly even two of strength, which then turns into exhaustion, so that I can start selling. Because of this, I think you have to look at this as a market that you are trying to find“cheap US dollars” to start buying. It's not until we break above the 0.6350 level that momentum would pick up enough to get bullish about the Australian dollar itself. That being said though, this is a market that I think will eventually have to come to terms with the idea that the Australian economy is highly levered to the Chinese economy, and therefore you need to see China's strengthen in order to see Australia strengthen from the longer-term perspective.
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