The Australian dollar initially fell during the trading session on Friday, but found the one-hour uptrend line to be supportive enough to turn the market around and make it rally. I think the market will continue to struggle to go higher, as the 0.80 level above is massive resistance. The 0.80 level has been important more than once on the longer-term charts, and essentially “longer-term fair value.” I think that if we can get above that level, it is going to signal a “buy-and-hold” scenario for the Aussie. Therefore, think it’s a difficult to get above that level. In the meantime, I think short-term pullbacks are going to continue to be opportunities to pick up the Aussie on the cheap, as we try to build up the breakout momentum.
If we do break down below the uptrend line, I think it is only a minor setback, as we have a significant amount of support in the form of a gap near the 0.78 level. In fact, the gap has already held, so I think breakdowns are simply going to be minor events in the longer-term perspective of things. The Aussie of course will be highly influenced by what’s going on in the gold markets, which have recently broken above the psychologically important $1300 level. By showing the strength that it has, I think the gold markets give us an idea that the Aussie needs to continue to the upside, but both may be looking for value in the short term.
AUD/USD Video 08.01.18
This article was originally posted on FX Empire
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