AUD/USD forecast for the week of August 21, 2017, Technical Analysis

The Australian dollar went back and forth during the week, ultimately settling on a neutral looking candle. Because of this, I think we have tested the 0.78 level for support, and I think that the buyers will probably return. It’s not until we break down below the 0.7750 level that I would consider selling, and the weakness in the US dollar should continue to propel this market higher. However, I’m the first person to admit that the 0.80 level above will continue to be very difficult to break above as it is important on charts going back decades. Nonetheless, I think that the gold markets could give us reason enough to rally as well, especially if they break above the $1300 level. The market is an anti-US dollar mood overall, and I think the Australian dollar will of course benefit from that.

I have no interest in selling this market until we break down below the 0.7750 level, and even then, I would be a bit hesitant. I think that would be a short-term pullback, and I believe that the overall trend is going to continue to the upside but we may get some choppiness occasionally as markets don’t go in one direction forever anyway. It may take a certain amount of momentum building to finally break above the 0.80 level, and that could add to the volatility as well. We are entering one of the quietest periods during the year, as most traders will be away for holiday. Because of this, I think that the market may grind between the 0.7750 level on the bottom and the 0.80 level over the next couple of weeks, but it does look like we are trying to break out to the upside longer term.

AUD/USD Video 21.8.17