The Aussie dollar continues to rise against the US dollar, but in a very slow manner. The grind in this pair is part of what makes it appealing, though. The market remains very much a “buy on the dips” scenario at the moment.
AUD/USD
The Australian dollar has rallied against the US dollar during the trading session on Friday, despite the fact that rates in America have climbed a bit. That being said, we've got a market here that looks like it is trying to break out to the upside, perhaps reaching above the 0.71 level. If it does, the next obvious support and resistance level on the chart is the 0.7150 level.
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This is a market that is trying to anticipate potential interest rate hikes coming out of Australia, and perhaps a way that some forex traders are getting involved in the commodity markets.
Short-term pullbacks continue to be buying opportunities, but I'm not ecstatic about being bullish here, because I do recognize that it would not take much to freak the market out with headlines coming out of the Middle East. As we head into the weekend, there is that very serious fear out there that maybe we gap down right at the open. It'll be interesting to see how that plays out.
Technical Support and Grinding Uptrend
Ultimately, this is a nice uptrend that has been going for a while, with the 50-day EMA underneath offering support, right along with the 0.6950 level where the 200-day EMA is rapidly approaching.
Buying the dip probably works, but you will have to be somewhat patient with this pair, as it's more of a grinding market than anything else. Short-term traders are probably particularly attracted to the Aussie dollar at the moment, as Australian dollar traders have been relentless to the upside, but very slow about it.
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