AUD/USD struggles on Monday, showing signs of resistance above

The Australian dollar tried to rally initially during trading on Monday but found the 0.77 level to be a bit too resistive to continue going higher. By showing resistance there, it looks likely that we are going to roll over towards the uptrend line underneath, which has been important for months, essentially the bottom of an up-trending channel. A breakdown below that uptrend line could send this market down towards the 0.75 handle and would be a very bearish development indeed. The markets will continue to struggle until we can break above the 0.77 level, an area that has been important as of late.

The 0.75 level underneath should be massively important, but if we break down below there, we could unwind rather drastically. A break above the 0.7750 level could send this market much higher, and of course would be a significant building of upward pressure and a sign that it would be more of a “risk on” market. I think that a lot of the news coming up this week will have a massive influence on this pair, especially the jobs number on Friday. Between now and then, I would anticipate that we will see a lot of choppiness. However, if we get a sudden and obvious move, then the only thing you can do is follow it. I believe that volatility is now here to stay, so keep that in mind and recognize that this pair will get significantly choppy because of that change in attitude and volatility.