Australian dollar falls only to find support during the week

The Australian dollar fell significantly during the trading sessions that make up the previous week, only to find support underneath the 0.75 level. Because of this, it’s likely that we will continue to see buyers jump into this market, perhaps reaching towards much higher levels. The 0.75 level of course is very important, as it is not only a large, round, psychologically significant figure, but it’s also an area where we have seen support previously. I think that the market will eventually rally from here, perhaps in reaction to what’s going on around the world, and perhaps some type of avoidance of geopolitical concern and maybe even the gold market.

I believe that we could bounce as high as the 0.80 level in consolidation, but obviously that would take some time. If we break down below the recent lows, then I think we could unwind to the 0.7250 level. Ultimately, I think that the market will try to continue to grind to the upside, and perhaps reach towards the 0.80 level over the next several months. I think it’s going to be very choppy and difficult over the next several months, unless of course there is some type of massive unwind when it comes to risk appetite. I think a lot of that has already been priced then though, so I’m willing to take the somewhat contrarian attitude that we are going to find buyers eventually. If we break down, there will probably be a ton of negative news that will make things obvious.