The US dollar has bounced significantly over the last couple of sessions, but then softened a bit during the session on Thursday. The 50-day EMA is resistance, and I think at this point we look at pullbacks as a potential opportunity to take advantage of the uptrend line and the 105-level underneath being so important. It’s not until we break below the 105 level that I would be concerned, and in the meantime, I think we are simply trying to build up the momentum to rally from here. A lot of the bullish pressure could come from the market calming down about a potential trade war, which of course would be good for risk appetite in general. That should have the stock market rallying, and that could send this pair higher as the two correlates quite nicely.
The Australian dollar rallied during the trading session on Thursday, as we approached the 0.77 handle. If we can break above there, the market will probably go looking towards the 0.78 level, and then possibly the 0.80 level above there. The uptrend line just below should continue to keep this market alive, and if we can stay above that uptrend line, I think that the market should continue to go much higher. The uptrend line has been in effect for several months, and if we can stay above there, that would be a very good sign for the longer-term. I believe the gold markets of course will have their usual influence, but if we can break down below the uptrend line, that could send sellers in with both feet. I think that the market continues to be very volatile, but I currently believe that we are trying to form some type of base. Keep your position size small and add only when proven correct.