AUD/USD Forecast August 8, 2017, Technical Analysis

AUD/USD daily chart, August 08, 2017

The Aussie dollar rolled over a bit during the early Monday session, as the 0.7950 level has offered a bit too much in the way of resistance. Interestingly enough, it is roughly the 50% Fibonacci retracement level from the selloff after the jobs number on Friday, so I think that we are going to see a bit of continued weakness. Obviously, the 0.79 level is offering some support, but what you should be most cognizant of is that the 0.80 level above is a major area going back decades. Essentially, one can look at the weekly charts and discern that we are either in an overall uptrend if we are above the 0.80 handle, or an overall downtrend if we are below it. Currently, we are fighting to figure out which way to go.

The US dollar coming back

I think that the US dollars about to make a resurgent move as a lot of traders had been betting that the Federal Reserve would not be able to raise interest rates further. I think this is not true, and I believe that the employment figures on Friday have people thinking the same way. The Australian dollars highly leveraged to gold, and that looks to be rolling over as well as we have made a “lower high” recently. Because of this, anticipate that we will break down below the 0.79 level and continue to grind lower. It is not until we break above the 0.7950 level that my thesis would change, and even then, I think that the 0.80 level is going to continue to be too much for the buyers to overcome. Regardless what happens, I expect to see choppy behavior in the Aussie dollar, as we try to figure out where interest rates go next in Washington DC.

Written by FX Empire