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AUD/USD Price forecast for the week of December 11, 2017, Technical Analysis

Christopher Lewis
Updated
The Australian dollar is currently testing the 0.75 level underneath, a major support level. Gold markets need to help, but so far they are not.

The Australian dollar initially rally during the trading week, reaching towards the previous resistance, and then rolled over significantly to test an uptrend line that extends almost 2 years. If we break down below this uptrend line, I feel that we may have much farther to go. This would be confirmed on a daily close below the 0.75 level, suggesting that the US dollar would pick up steam. Gold markets have not been helpful for the Australian dollar, and I believe that will continue to be a major issue. If and when we break down below the support level, the retracement to a move back at the 100% Fibonacci level makes complete sense. That has the Australian dollar going to the 0.7330 level. A breakdown below that level should then send the market towards the 0.7250 level, and then longer-term down to the 161.8% Fibonacci retracement. That’s not to say it will be easy, and I do recognize that the move below this uptrend line is probably going to need a hawkish Federal Reserve after the next interest rate high, but at this point that seems to be very possible.

In general, I don’t have any interest in buying this market, least not until we would do a break above the weekly candle that we have just printed, as it would show a significant bounce from an area that quite frankly needs to hold. Gold would also have to rally, and perhaps even break above the $1300 level to add any momentum to this market, as the 2 are so interconnected. I just don’t see this happening, so I remain very bearish in general, expecting the Australian dollar to continue the move that we have seen over the last several weeks.

AUD/USD Video 11.12.17

This article was originally posted on FX Empire

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