Look at this as a potential “buy on the dip” situation now that we are starting to clear so much in the way of downward pressure.

The Australian dollar has rallied significantly during the trading session on Thursday to pressure a major selloff level that has been crucial more than once for the market. Because of this, I think it’s setting up for a very noisy Friday. It will be interesting to see whether or not we can continue to go higher, or if we sell-off in some type of concern. The job number will throw chaos into the market as per usual, and now it looks like we are at such a crucial level that this could be quite pronounced.

With this in mind, if we can break out to the upside it could open up the possibility of a move to the 0.74 level, but we could see a run higher only to see it fall apart as soon as the jobs number is announced. In other words, Friday is going to be a great day to lose money if you are not cautious. The absolute volatile nonsense that we continue to see in the market is going to be a problem going forward, and I don’t see how Friday is going to be any different. We may see this as a situation where the US dollar gets crushed, only to turn around and rally quite viciously once we get to the top of the longer-term range. Because of this, you need to be very cautious with your position size, because a day like Friday can get you into a lot of trouble.

On the downside, the 0.7150 level is going to be significant support, so if we were to break down below that level it would be extraordinarily negative for the Australian dollar. I think at this point, it’s anybody’s guess as to how the markets cannot behave after the jobs figure, as I think if you are trying to put on trade ahead of time, you are going to be gambling. That being said, certainly looks as if there is a lot of upward momentum so that is something that should probably be kept in the back of your mind. The markets will remain volatile, but I look at this as a potential “buy on the dip” situation now that we are starting to clear so much in the way of downward pressure. The size of the candlestick is also worth noting.

I have no interest in trying to short this market until we break below the $100 level.

The West Texas Intermediate Crude Oil market initially pulled back on Friday but then turned around to show signs of strength yet again. We are now threatening the top of the shooting star from the previous session, and it looks like we are going to go higher. Ultimately, the $115 level would be a target, perhaps even the $120 level after that.

Short-term pullbacks will continue to attract a lot of attention, especially as the $105 level has offered both support and resistance previously, and then after that, we have the 50-day EMA which is at the $101.66 level and rising. It has offered quite a bit of dynamic support for a while, so it does make quite a bit of sense that we would see buyers on these dips, and because of this I think it will more than likely continue to attract a bit of momentum to the upside. Furthermore, we also have to keep in mind that the economy is reopening and oil will continue to be a high priority.

Keep in mind that the Russian oil supply being threatened has a negative effect on the markets as well, so given enough time it is likely that we will see an attempt to go much higher and based on the triangle that I have drawn on the chart, we could see a “measured move” to the highs that we had recently made. The initial surge higher was due to the Russian invasion of Ukraine, but now that we are grinding higher, it is a much more sustainable move. The market will continue to be well supported as the overall momentum has been so positive. I would anticipate more of the same, a simple sawtooth pattern to the upside.

However, if we break down below the 50-day EMA, the market is likely going to threaten the $100 level. If we break down below the $100 level, then $95 will be the next target. Ultimately, this is a market that I think will find plenty of interest going forward, despite the fact that the US dollar is so strong. Distillates continue to shrink as far as inventory is concerned, so petroleum prices will continue to rise as well. I have no interest in trying to short this market until we break below the $100 level.