The Australian dollar rallied significantly on Thursday, and it looks like the market is trying to save itself a little bit. That being said, I think it is probably only a matter of time before we see resistance come into the picture, so I will be looking to short this market. I want to pick up “cheap US dollars”, but we have gotten a little overdone. The fact that we ended up forming a nice-looking hammer during the trading session on Thursday, it suggests that we are going to bounce a bit.
The 0.6850 level is an area where we have seen both support and resistance previously, and then of course the 0.70 level could cause resistance. What I’m waiting for is a bit of a rally that we can fade at the first signs of exhaustion. With that being the case, I think we have a situation where you are going to have to take a moment or two and let the market bounce a bit. After all, the last thing you want to do is to chase the market at this point. However, if you get some type of opportunity to pick up dollars at a lower value, then by all means you should do so.