Australian dollar rallies but fails to keep gains for the week

The Australian dollar initially tried to rally to the week but turned around form a bit of a shooting star as we have seen some exhaustion. If we can break above the top of the shooting star, then the market could go much higher, but it obviously is going to be very difficult. We have several hammers underneath that could offer support though, especially near the 0.75 level. If we were to break down below this hammers, that could be catastrophic. In the short term, I think it’s only a matter time before the markets find some type of momentum that we can follow, and if we can rally to the upside I think that longer-term investors will continue to hold. Pay attention to the Gold markets, because they have a major influence and where we go next, and if they can rally, that should drive upward pressure on the Australian dollar as well.

The alternate scenario of course is that there is some type of “risk off” situation, and that could send traders running to the US dollar, and that would be some type of geopolitical situation or major economic shock that would be obvious. At that point, the market would probably unwind towards the 0.7250 level next. However, from a technical standpoint this looks like a market that is trying to build up upward pressure.