AUD/USD Price Forecast December 26, 2017, Technical Analysis

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The Australian dollar has rallied a bit on Friday, as we continue to grind to the upside. However, there is trouble waiting just above, so even though we look bullish, it’s not an easy trade to take. · FX Empire

Christopher Lewis

Updated Fri, Dec 22, 2017, 10:37 PM

The Australian dollar has rallied a bit during the day on Friday, but in low-volume couldn’t make a huge move. That’s not a big surprise, as this time a year tends to be more about holidays than anything else. Beyond that, the gold markets should move higher for the Aussie to continue to go higher, and so far that has been the case. Ultimately, the 0.78 level above is resistance, and the 0.80 level above that is even more important to the market. That has been a fulcrum for the market over the last several decades, and breaking above the 0.80 level will be difficult to do. If we can, then the Australian dollar becomes more of a buy-and-hold market. Until then, I expect a lot of noise, although we are starting to see upward pressure in general.

Alternately, if we break down below the 0.7650 level, the market then breaks down to the 0.75 handle. That’s a level that has been massively supportive, and of course has an uptrend line attached to it on the longer-term charts. If we were to break down below the 0.75 handle, the market would collapse at that point, perhaps reaching to the 0.7250 level underneath. In general, this is a market that looks likely to be very noisy, so keep your position size small, and as the market is likely to be a bit thin volume wise, I think the next week will be difficult to trade. However, I suspect that once we get into January we will make a significant move that we can follow.