US dollar changes fortunes mid-day on Friday against Aussie

The Australian dollar of course tried to rally a bit during the trading session on Friday but found enough resistance at the 0.76 level to rollover. As I record this, it looks as if we are going to wipe out most of the gains from the day, but more importantly I am paying attention to the major uptrend line that we had recently broken down through, which is just above the 0.76 level. If we do not turn around and break above the highs of the day, that means that we could very well fall from here. That would be a “lower high”, which of course would be the first signs of trouble. Alternately, if we break above the 0.76 level handily, and perhaps on a daily close, the market could continue to go much higher as we have recently tested a major uptrend line on the weekly chart as well.

I think this market because of these trendlines will continue to be very noisy to say the least, so it’s probably easier to trade other currencies right now, but in general I do favor the US dollar overall as it is likely to benefit from higher interest rates in the United States and of course a bit of a safety play due to the geopolitical uncertainty. I think if we do break out to the upside, the market could very well go to the 0.77 level above which was structurally important in the past as well. I still favor the downside, although the last several days of course have been very strong.