The rallied quite nicely during the day on Tuesday and continued to push above the 0.70 level early on. This, of course, is a bullish sign, as the 0.70 level continues to be very crucial on the longer-term charts. With that in mind, the fact that we have moved above to the 0.7050 level is a good sign.
Because of this, it looks as if we are going to continue to see buyers on dips, and as a result, this is probably going to continue to be a short-term basing pattern that we are trying to form. The market has a significant support level all the way down to the 0.68 level, so there are 200 pips worth of support waiting to be taken advantage of. If that’s going to be the case, then look for buying opportunities between here and there. Simply put, this is about the and not necessarily the Australian dollar. In other words, it comes down to risk appetite.
Take a look around the Forex world, if the US dollar is falling in value then it makes sense to start buying this pair. However, if the greenback is strengthening against most other currencies, then it’s probably best to leave this market alone as there is so much in the way of support. This isn’t to say that we can break down, but quite frankly buying the greenback against other currencies will probably be much easier than trying to short the here, simply because there’s so much structural support underneath. It’s about relative strength, and of course if the greenback strength and you want to punish some of the weaker currencies out there such as the or possibly the . The Australian dollar has far too much in the way of support underneath it to try to fight that battle.
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