US dollar rallies against the Australian dollar for the week
The Australian dollar has gone back and forth during the week but formed a green candle after three hammers. That’s a very bullish sign, and I do think that the Australian dollar will continue to rally due to this, but I also see a major amount of resistance above. In other words, I think what we are looking at is the market trying to stabilize in a range, and therefore could be rather choppy and sideways over the summer. I think the uptrend line should continue to offer resistance, just as the 0.77 Level well. If we can break above that level, then obviously things change but in the meantime I think we will struggle to rally above there, just as we may struggle to break down below the several hammers that we have recently formed.
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However, if we were to break down below those three hammers, that would be catastrophic and unwind this market to the 0.70 level in my estimation. Pay attention to the Gold markets, they have their usual influence, but at this point it looks as if the Australian dollar is trying to be very quiet, meaning that it’s difficult to invest in for the longer-term. As soon as we get some type of impulsivity in the market, then perhaps we can put money to work. Until then, it’s a short-term back and forth situation.