The Australian dollar rallied significantly on Wednesday

Pay attention to the gold market, that could give us an idea as to where the Australian dollar will go. The gold markets rallied towards the $1350 level, and if we can break above there I think the market probably will continue to see the AUD/USD pair continue to go higher. I think short-term pullbacks will be buying opportunities, based upon the action that we have seen during the day. The 0.7750 level is an area that should remain somewhat supportive, and I think that in the short term we should continue to see plenty of reasons for people to buy the Australian dollar.

I believe that the Australian dollar will serve as a proxy to the comments coming out of both the United States and China, as the Australian dollar is a proxy for Asian markets. Remember, Australia is a major exporter of commodities to Asia, specifically China. Because of this, if the Chinese economy and the trading situation is good for the Chinese, it’s likely that we will continue to see the Australian dollar strength in. Ultimately, this is a market that I think will continue to see a lot of interest being put into it, but I also believe that we will eventually have to come to grips with the 0.80 level above, which is a major level on longer-term charts. If we can break above there, then we can continue to go much higher, but I think the market is hell-bent on testing that area in the meantime, meaning that short-term buyers will continue to run the show.