The Australian dollar rallied significantly during the week, breaking above the 0.78 handle on Friday. It looks likely that the market is going to continue to see positive pressure, as we have bounced nicely from the 0.75 level, the bottom of an uptrend in channel that has held true. Beyond that, we have the US dollar failing against most currencies right now, and I think we are going to see this continue into the new year. With gold breaking above the vital $1300 level, it’s likely that we will continue to see the Aussie dollar rally as well, and I think at this point we are going to go looking towards the 0.80 level above, which has been important both psychologically and structurally over the last several decades. Once we clear that level on a weekly close, I think it’s more of a buy-and-hold market that goes looking towards much higher levels.
In the meantime, if we pull back I think there is plenty of support between current levels and the 0.75 handle, which should be massive and its importance. If we were to break down below there that would change everything in this pair, but right now I think it’s very unlikely to see that happen. Given enough time, I anticipate that this market will probably go hunting for the 0.82 handle above, which coincides nicely with the uptrend in channel. Expect noise, but I think on pullbacks you must be willing to add to what has been a very reliable move over the last 2 years.
AUD/USD Video 02.01.18
This article was originally posted on FX Empire
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