This is a market that I think continues to show negativity, so I like the idea of shorting signs of exhaustion if we get those.
At this point, the market is threatening to 0.69 level, which is an area that I think a lot of people pay close attention to. We did pierce that level at one point, but then turned around to rally and break above it. This does not suggest to me that the market is ready to turn around for a bigger move, just that we are struggling a bit at this point. If we can break down below the bottom of the candlestick, then I think that it’s likely that the Aussie will go looking to the 0.68 level. After that, we could open up a move down to the 0.67 level. If we were to break down below the 0.67 level, then that would be a major turnaround in the market, and perhaps open up a rush of selling.
On the other hand, if we were to rally at this point, the 50-day EMA just above is going to cause a little bit of technical resistance, and then possibly the 0.70 level. The 0.70 level is a major area of noise all the way to the 0.7050 level. If we were to break above the 0.7050 level, then it’s possible that we could go much higher. If we break above there, then we would be looking at a potential move to the 200-day EMA.
This is a market that I think continues to show negativity, so I like the idea of shorting signs of exhaustion if we get those. At this point in time, it’s likely that we will see the US dollar strengthen given enough time. However, I think it continues to be very noisy to say the least, so it’s likely that we will have plenty of short-term selling opportunities in what is going to be a longer-term move.
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