AUD/USD Forecast December 26, 2012, Technical Analysis

The AUD/USD pair tried to rally at the beginning of the Monday session, but with low-volume the market found it being pushed lower again by the end of the session. In fact, we closed below the 1.04 level which of course is a very sign, but above the vital 1.03 support level. It is below the 1.03 level that we find this market much easier to start selling. This is because there are so many minor support levels below that could cause problems.

Granted, we see that the market has sold off drastically, but this is part of the problem with selling now because of the extreme move that we’ve already seen. Also, if the U.S. Congress can come to some type of deal with the fiscal cliff talks, we could see a “risk on rally” that would push this pair much higher. Because of that, we need to see free and clear shorting opportunities which we simply do not above the 1.03 level.