AUD/USD Price Forecast January 23, 2018, Technical Analysis

The Australian dollar has rallied a bit during the day on Monday, but we are just above the 0.80 level, an area that has been a major price fulcrum going back decades in this market. In fact, the 0.80 level has been important as far back as the late 1970s, early 80s timeframe. While it seems somewhat counterintuitive, these areas tend to show a phenomenon known as “market memory”, meaning that there will be reactions.

Gold markets of course have an influence as well, and they look rather healthy. The US dollar has been selling off and that not only helps gold, but it helps currencies overall anyway. I suspect that pullbacks will be thought of as buying opportunities, and I think that the 0.78 level underneath should be the “floor” in the move. Longer-term, the market continues to be very noisy, but I think if you are cautious, you may be open to build up a large positive position. I would be very slow in building up my trade, at least until we break out above the 0.81 level, which I see as the market breaking free and ready to go much higher.

We would need to see a significant change in the overall attitude of the greenback to start shorting this pair. I just don’t see that happening, I think that we are starting to see significant trends being formed for 2018, and the Aussie going higher will be one of them, but we have a lot of work to do in the meantime.

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