Australian dollar choppy during Monday trading

The Australian dollar has been pretty choppy during the Monday session to start out the week, but that’s not a huge surprise considering how impulsive the move higher was during the previous week. I believe currently the 0.75 level is going to continue to offer support, and that’s assuming that we even reach towards that area. While the Australian dollar has been very soft as of the last couple of months, we’ve recently seen a strong bounce. When looking at the weekly chart, you can see that we had formed a massive hammer during the previous week, and it now looks as if we are trying to turn things around, at least for the interim.

I recognize that somewhere near the 0.77 level we should see a significant amount of resistance, so although I am a bit bullish in the short term, I recognize that we could turn right back around yet again. If we were to turn around and break down below the 0.75 handle, that would be negative enough for me to think that we would probably test the lows again over the previous week, which is near the 0.74 level. Break down below there would be extraordinarily negative and send this market much lower. I should point out that we had recently broken below the uptrend line that had been in vogue for so long, and that typically means that we will in fact see more selling pressure. However, that is an argument for later.