Australian dollar sideways during Thursday trading

The Australian dollar has gone sideways in general, as we continue to dance around the 0.7650 level. The market looks very likely to continue to go to the upside longer-term though, and I believe that the 0.76 level underneath should be a major support level. Overall, I think that the market will continue to try to grind towards the 0.77 level, which is a major resistance, and of course there is a previous uptrend line that slices through that level. I believe that the market will continue to be volatile and noisy, so I think that the overall attitude of this market is one that although bullish, could be very dangerous. I also believe that we may see a return to US dollar strength sometime relatively soon, but certainly it looks as if the buyers are in control.

If we were to break down below the 0.76 level, then we will test the previous hammers from the weekly chart. I think that the market will eventually find reason enough to go higher, and perhaps sell off from an even higher level. I think pain attention to the gold market will be crucial as well, because if that rallies that will often spell negativity for the US dollar, and of course lift the Australian dollar at the same time. This gives you a bit of a “double whammy” in favor of the Aussie. I anticipate that we are going to get a short-term pullback that find buyers closer to the 0.76 level.