The Australian dollar rallied a bit during the week, bouncing from the uptrend line that we had formed going back 2 years, and the 0.75 level underneath continues to be massive support. If we were to break above the top of the candle, we could rally from here, but I recognize that the 0.7750 level above is massively supportive and resistive based upon longer-term charts. I think that we will continue to see a lot of choppiness and indecision, especially as the gold markets haven’t exactly been taking off either. However, I look at the gold markets and recognize that we are trying to break above the $1300 level, so I believe that we need to see the gold markets break above $1300 to take any rally in the Australian dollar with faith.

Alternately, if we were to break down below the 0.75 handle, the market would probably go looking towards the 0.7350 level underneath. A breakdown below there could send this market much lower, perhaps down to the lows of 2016, but right now I don’t think were ready to make that move quite yet. I think the volatility continues to be a major issue, so position sizing will be crucial when it comes to the Aussie. If we were to break above the 0.78 level, that would be an extraordinarily bullish sign as we would approach the 0.80 level yet again. That level has been a massive move inducing level on longer-term charts going back to the 1980s. Because of all of this, I think it’s going to be easier to trade the Australian dollar from a shorter-term perspective, as we have so many support and resistance areas in such a short amount of space.

AUD/USD Video 27.11.17

This article was originally posted on FX Empire

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