If we see some momentum to the upside here, we could see the Aussie dollar recover quite nicely, as it would stay in a longer-term range. This will probably be a pair that makes a move in the next couple of days.
AUD/USD
The Aussie dollar initially fell a bit during the trading session on Monday but turned around to show signs of life again. At this point, I think we are trying to repeat what we saw in late March, early April, when we were bouncing around trying to find a bottom. If we do find a bottom here, that just means it will solidify overall consolidation that we've been in for the entire year.
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All things being equal, this is a market that I think continues to look at this as a pair that it really doesn't know what to do with.
Commodity Sensitivity and Key Trading Levels
The Australian dollar is highly sensitive to the commodity markets, which have been a little weak, but if we were to break down below the 0.6875 level, we could send this market lower. If we rally from here, breaking above the 0.6950 level, I think the first target will be 0.70. If we can break above there, then we could go much higher.
Ultimately, this is a market that continues to watch the situation with the US dollar, whether or not it's strengthening, and that could give us a little bit of a heads-up here. But quite frankly, I think the Australian dollar is going to do fairly well in comparison to its contemporaries.
This is worth watching. It could make a nice swing trade toward the 0.7150 level. We just need a little bit of momentum. I do think that the Aussie being fairly reasonably solid makes sense. The Reserve Bank of Australia is likely to remain somewhat steady, and that helps the situation as well.
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