AUD/USD Forecast for the Week of Dec. 12th, 2011, Technical Analysis

The AUD/USD pair recently rose back above the parity level, and has since been very volatile. This makes sense as it is so sensitive to headline risk. The markets have been acting erratically lately, and this pair shows that emotion-fueled trading quite well. Choppiness should continue as the markets continue to digest the issues surrounding not only Europe, but potential slowing down in China as well. The weekly candle is a doji, and this shows just how directionless this pair is right now. In order to get long, we will need to see a weekly close above the 1.05 level, and shorting would be under parity. Until then, we are simply watching – but prefer shorting as the panic trading seems to rule over all every couple of days.