AUD/USD Forex Technical Analysis – August 24, 2016 Forecast

The AUD/USD traded lower early in the session, but recovered most of its loss after touching a short-term 50% level. The choppy price action this week represents uncertainty over the direction of U.S. interest rates. This is expected to be cleared up somewhat on Friday when Fed Chair Janet Yellen delivers her speech before central bankers at a Jackson Hole, Wyoming conference.

Investors aren’t even sure if she is going to address U.S. Fed policy. And if she does, they don’t know if she will be dovish or hawkish. Some say she could concur with hawkish statements made last week and over the week-end from several Fed members, suggesting the economy is close to being strong enough to support an interest rate hike.

Technically, the main trend is up according to the daily swing chart. The market is also currently trying to shift momentum from down to up. Earlier in the week, the Aussie formed a potentially bullish closing price reversal bottom after touching a key retracement zone.

The main range is .7420 to .7755. Its retracement zone is .7587 to .7548. This zone was tested successfully on Monday when the Aussie bottomed at .7583. This was also slightly above a major Fib level at .7571.

Based on the current price at .7620, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the uptrending angle at .7620.

Overtaking this angle will signal the presence of buyers. This could create enough upside momentum to challenge the downtrending angle at .7655.

A failure to overcome .7620 will signal the presence of sellers. If volume increases on the move, the Aussie could fall back to .7587, .7583 or .7571.