MARKETS SPECTATOR: Finding value in the modern dollar

The increased demand for Australian dollars has meant the old rules no longer apply fully when trying to predicting its moves. Trading the dollar is a harder game but there are still opportunities.

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Source: The Bourse

The above chart of the Australian dollar, on a weekly basis shows the range the dollar has been oscillating in since early last year. Over time that range has been contracting with upside resistance now around the $1.05 to $1.06 mark and downside support seen near the $0.97 to $0.98 cent level. Also, the midpoint around the most recent low of $1.02 will probably also see some buying support.

The general feeling in the market is that the risk is definitely to the downside for the Australian dollar, with the above price action over the last few months confirming this view. Most recently, the market has made two attempts to move up through the $US1.06 level without success, indicating there are plenty of willing sellers around the $US1.06 figure. From here, price action is pointing towards a move lower to test support around the $US1.02 level.

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