AUD/USD Price Forecast February 6, 2018, Technical Analysis

The Australian dollar bounced from the significant 0.79 level on Monday, as the market has gotten a bit oversold. It looks as if we are trying to reach towards the 0.80 level, an area that has been very important over the longer term, as it has been a fulcrum for price going back decades. In fact, I look at this as an area that is bordered by the 0.81 level above, and the 0.79 level on the bottom. Essentially this is a 200 Pip range that we are finding ourselves bouncing around in. The next trade is simply a matter of following which way the market reacts to these levels, as it should matter longer term.

It looks as if the market is trying to break out to the upside longer-term, but this is an area that is so important that it doesn’t surprise me that it has taken so much effort to do so. I don’t think it’s can be an easy move, but longer-term it looks as if the US dollar is trying to fall apart. Ultimately, I believe that this market is one that will continue the longer-term correlation to gold, so pay attention to that as well. If gold can break above the $1400 level longer-term, that will send this market much higher over the next several months, if not years. Alternately, if gold markets fell apart, that could put massive pressure to the downside in this market. If we can break down below the 0.79 level, I suspect that we will try to reach the 0.7750 level underneath.

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