AUD/USD Forecast for the week of December 3, 2012, Technical Analysis

The AUD/USD pair had a negative 5 sessions over the previous week, but has remained above the 1.04 level. This area is significant support, and is the “midpoint” of the larger consolidation area between the 1.02 and 1.06 handles.

The Australian dollar is of course headline and risk sensitive, so we think that the continuing US “fiscal cliff” headlines will move this market around. However, once the congressional leaders to sign to put together some type of deal, this pair could skyrocket as it is highly connected to the commodity markets. As for selling, we wouldn’t do it until we clear the 1.04 level on the downside with it least a daily close.