Australian dollar dances and tight range on Wednesday

The Australian dollar danced with the 0.75 level during the trading session on Wednesday, as the large figure of course has caused a reaction. The market has recently broken through a major uptrend line, and the 0.75 level was the next major area underneath. I think that the market breaking down from here makes sense, because we have seen a significant breakthrough support. However, between now and the jobs number it is unlikely that we will see a major move. In fact, we may see a short-term bounce, but that bounce should end up being a selling opportunity.

If the jobs number comes out strong, that will be yet another reason to think that interest rates are going to rise in the United States even further, and that should continue to put pressure on this pair as the greenback strengthens. It will also put pressure on gold, so it’s a bit of a “double whammy” for the Aussie dollar. Alternately, if the jobs number comes out very soft, that could put some of the interest rate hikes in question, and that of course is negative for the US dollar which should send gold and the Australian dollar higher. Between now and then though, it’s hard to imagine a lot of people will be willing to put a ton of money into the market. That of course means that we probably won’t go very far in the short term, but most certainly by the time 8:30 AM EST rolls around on Friday, things will get interesting.