Australian dollar falls to find support during the week

The Australian dollar has fallen a bit during the week, reaching below the 0.75 level yet again. However, for the third week in a row we have seen buyers under that level so it’s very interesting to see where we go next. I think we are starting to make a significant case for a bounce, but there’s also the previous uptrend line that will come into play. · FX Empire

Christopher Lewis

Updated Fri, May 18, 2018, 11:54 PM

The Australian dollar has broken down a bit during the week, slicing below the 0.75 handle. I think that the market will continue to find buyers under that area, as we have formed triple hammers. If we break down below the hammer from the previous week, the market could go much lower, perhaps down to the 0.70 level. That would be a break of significant support that we have seen but speaking of support we can look at the previous uptrend line as former support that should now offer resistance.

The 0.77 handle above is an area that is also resistance, so I think that any rally at this point it’s probably a short-term opportunity at best. I think that exhaustion market sends this market back towards the 0.75 handle. I think the uptrend is somewhat limited, but if we were to close on the weekly chart above the 0.7750 level, that could be reason enough to go much higher. Ultimately, I believe that the US dollar continue to show interest rate strength will continue to favor the greenback. I believe that there are a lot of noisy actions waiting to be had, but the one thing that I would be very cautious about is putting too much money to work right away. I would wait for confirmation and add to my positions.