AUD/USD Price Forecast March 7, 2018, Technical Analysis

The Australian dollar rallied significantly during trading on Tuesday, breaking above the psychologically important 0.78 handle. This has been more of a “risk on” move as the US dollar has struggled against most currencies around the world. Talk of a trade war has abated a bit, and that of course has helped risk appetite and animal spirits on Wall Street, which of course has traders in America selling off the US dollar and looking for higher returns around the world. I think that at this point, pullbacks will offer value the people are willing to take advantage of, just as they will take advantage of breaking above the top of the highs for the day.

This isn’t to say that we will explode to the upside without significant pullbacks, but quite frankly that’s exactly what we hope to see, as it gives us an opportunity to pick up value occasionally. Ultimately, I think the 0.79 level will be targeted, and of course then the 0.80 level afterwards, as it is the major level that traders have been playing for several years, going back to the 1980s. I think it will take something special to finally leave the 0.80 level in the rearview mirror, but eventually we could. The market underneath offers plenty of support, so at this point I don’t have any interest in shorting as we have made a “higher high” on the hourly chart attached.

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