AUD/USD forecast for the week of August 14, 2017, Technical Analysis

The Australian dollar had a slightly negative week, as there has been a bit of a “risk off” attitude to the Forex markets. Gold rallied, but that was due to safety, and not any type of speculation so the correlation did not hold. I see a significant amount of support underneath at the 0.7750 level, which was previously a massive resistance barrier. Because of this, and the fact that we have bounced a bit I believe that we may continue to try to grind higher. However, the 0.80 level above is massively resistive, and important on charts going back several decades. It is because of this that I feel the market will continue to be very sideways and choppy. Longer-term traders will probably have a difficult time dealing with this market, least until we can break above the 0.81 level which signifies more of a “buy-and-hold” attitude.

The alternate scenario

If we break down below the 0.7750 level on a daily close, I think at that point the market will probably go a bit lower, perhaps reaching towards the 0.75 handle. This is a market that is very volatile, and of course has a certain amount of risk appetite attached to it. Ultimately, I think that the next couple of weeks could be very choppy and sideways, mainly because we are in one of the least liquid times of the year as a lot of the larger traders are away at holiday. As you can see on the chart, I have 2 red lines marked. This could be the range going forward as we grind between the 0.7750 level on the bottom, and the 0.80 level above as resistance. It is not until we get an impulsive break out that I think traders will show any signs of confidence in one direction or the other.

AUD/USD Video 14.8.17