We continue to see bullish pressure in the Australian dollar, as the market has bounced significantly from the 0.75 handle below. We have been very bullish over the last several weeks, bouncing from the bottom of the up-trending channel, the large round number, and of course previous support. By forming a hammer for this previous week, looks as if the bullish pressure is continuing to strengthen, but I am a bit concerned about the overextension of this move. I think eventually we will go looking towards the 0.80 level, which is a massive level going back decades. If we can break above that level significantly, it becomes a “buy-and-hold” scenario where you can add on to the dips as the market would be free to go much higher.
I have no interest in shorting this market, least not until we break down below the 0.75 handle with some type of force and significance. Overall, I believe that the Australian dollar rallies right along with the gold markets which look very bullish as well. We have cleared the $1300 level in gold, and therefore I think it’s only a matter of time before we clear the 0.0 level in the Aussie dollar. We are roughly in the middle of the up-trending channel, so expect a lot of noise. We have recently broken above the 50% Fibonacci retracement level, with the 0.79 level being the 61.8% Fibonacci retracement level from the most recent downturn.
AUD/USD Video 08.01.18
This article was originally posted on FX Empire
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