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

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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. · FX Empire

Christopher Lewis

Updated Fri, Dec 8, 2017, 11:04 PM

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.