- The Australian dollar is still behaving erratically, as we are currently between significant resistance and support.
- It makes it reasonable that short-term traders will be drawn to this market, which I believe isn't likely to go anywhere very soon, as we continue to tinker back and forth.
AUD/USD still sees the same areas of importance
I find it rather clear from this chart that the 0.65 level is still significant. Naturally, this is a big round number, but there's more to it than that. We have previously observed resistance in this area, so some market memory is involved. As was previously seen, this region goes all the way down to the 0.6450 level. Thus, I believe that this should be viewed more or less as a support zone and less as a support line. I can see that we have been somewhat consolidating over the last few months when I look at the chart from a somewhat longer term viewpoint.
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Furthermore, the top of the consolidation area is, in my opinion, closer to the 0.66 level. In a significant FOMO trade, this market might rise significantly if it breaks above the 0.66 barrier. Under such circumstances, it is highly probable that we would witness widespread weakness in the US dollar, and it would likely be a rather clear trade. It remains to be seen if it really takes off, but for now, I believe the best course of action is to simply assume that the market will continue its sideways trend. Many people are currently unsure about the Federal Reserve's future actions, and if that turns out to be the case, the dollar will go in the wrong direction. Naturally, developments in China and worldwide trade have a significant impact on the Australian dollar, so keep a watch on those developments as well.
When all else is equal, I believe that this is the best range-bound trade opportunity between the 0.6450 and 0.66 levels. Because of this, I believe that swing traders will find this market to be rather neutral, but short-term traders will still be monitoring it closely. This could be a nice short-term market, but longer-term, we still have to see something change in order to get aggressive at all.
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