The Australian dollar has gone back and forth during the week, forming a relatively neutral candle. I believe that the 0.79 level is offering a bit of resistance, and it makes sense that we may see a bit of a pullback as we are starting to cross on the stochastic oscillator in the overbought position. The 0.80 level above is massively resistive, and if we can break above there, then I think it becomes more of a buy-and-hold scenario. This will be especially true if we make a fresh, new high. In the meantime, looking at this chart you can see that we have been in an uptrend channel, and that looks likely to continue to be the case. I believe the 0.75 level underneath is the “floor” in the market, but as we have extended even further, I believe we now will probably look to the uptrend line to form support.
If we were to break down through both of those barriers, then I think the Australian dollar would collapse, perhaps sending traders back down to the 0.70 level rather quickly. Pay attention to gold, if it starts to rally, that should be a reason to go long as well. Overall, I believe that the market continues to look at the US dollar as a currency that is going to fall in 2018, and that should continue to be the case in this market as well. The pullback should be thought of as value presented itself.
AUD/USD Video 15.01.18
This article was originally posted on FX Empire
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