Australian dollar falls during Friday session

The Australian dollar has broken down a bit during the trading session on Friday, slicing through the 0.76 level. There is plenty of support between here in 0.75 though, so I think it’s only a matter time before value hunters come back in to pick up the Australian dollar “on the cheap.” If we can break above the 0.76 handle, then I think the buyers will jump in again. However, we may also go lower in the short term, looking for more major support underneath. If we do, then I’m looking for some type of bounce to take advantage of. Either way, the short of it is that I’m not willing to short this pair, because we have seen such a strong amount of support on the weekly charts.

Longer-term, I think that if we do rally, we will probably go looking towards the 0.78 handle, and then possibly the 0.80 level. Gold markets of course have their influence on the Australian dollar as per usual, so if they rally that could help as well. The markets remain noisy, so I would start out rather quietly and with a small position, adding as the market works out in my favor. Remember, you can always build up a large position over time, you don’t have to put everything to work in one shot. That will be especially true in this market as it is so sensitive to risk appetite.