AUD/USD Price Forecast February 20, 2018, Technical Analysis

The Australian dollar has rolled over a little bit during the trading session on Monday, testing around the 0.79 handle. The market has plenty of support down to the 0.78 level, an area that should be massively supportive. Remember, the 0.80 level above has been important going back decades, so the fact that trading is so messy around this area is not much of a surprise. In fact, this translates quite nicely to the gold markets as the correlation remains high, and gold markets are struggling to get above the $1400 level. In short, if the AUD/USD pair clears the 0.81 handle, it has cleared this area of resistance it becomes a “buy-and-hold” type of market. That should correlate quite nicely with gold breaking above $1400, which would also make it a “buy-and-hold” type of market.

I suspect that both moves will happen at the same time, but it’s going to take a significant amount of momentum to make them both happen. I don’t have any interest in shorting the Australian dollar, I think that it is only a matter of time before the buyers get involved. So, we will either get a bounce here, or I will pick up a bounce closer to the 0.78 level. Longer-term, I fully anticipate seeing this market going towards the 0.90 level sometime this year, perhaps towards the end. The alternate scenario of course is that we get some type of massive “risk off” event, which of course favors the greenback, but you should see that market wide, not just against the Aussie.

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