The Australian dollar exploded to the upside on Wednesday, using the 0.75 level as support.

Ultimately, this was in reaction to the stronger than anticipated Australian GDP numbers, as evident by the impulsive candle initially during the day. We are still a very strong market as far as I can see, so I believe pullbacks offer value, just as we see in the New Zealand dollar. The 0.75 level underneath should be massively supportive, and essentially the “floor” in this market. I believe that every time we pull back people will be looking at this market as value, and take advantage of it. On top of that, we have external forces pressing the Australian dollar higher.

Gold markets

Gold (GLD, quote) markets continue to be very choppy but with an upward bias. I believe that an impending pullback in the gold markets and then impulsive move higher should continue to push the AUDUSD pair higher. Eventually, I anticipate that the market will go looking for the 0.80 level above, if we can continue to see strengthen the gold market, and the continuation of the support found in the copper market might be yet another reason to think that the Australian dollar will continue to pick up strength.

Pay attention to Asia, because if we start to see strength there, it should translate into a higher Australian dollar price as well. I have no interest in selling, least not until we break below the 0.7450 level again. Until then, I think dips must be looked at as value, and of course we like buying value in a market that has shown an impulsive moved to the upside. I believe that the $1300 level in the gold markets continues to be a target that once broken, will be very bullish over here as well.

Editor’s Note: Equity investors/traders can use the Currency Shares Australian Dollar Trust (FXA, quote) ETF to take positions in the Aussie dollar without a FOREX account.  The ETF looks to track the price of the Aussie dollar (AUDUSD), minus ETF fee. The fund seeks to reflect the price of the Aussie dollar (AUDUSD) with the shares representing a cost-effective investment relative to investing in the FOREX market.

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