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AUD/USD Forex Technical Analysis – August 31, 2016 Forecast

By:
James Hyerczyk
Published: Aug 31, 2016, 03:57 UTC

The AUD/USD is trading slightly better, however, prices are rangebound and volume and volatility are below average. There were no major reports out of

Australian Dollar

The AUD/USD is trading slightly better, however, prices are rangebound and volume and volatility are below average. There were no major reports out of Australia, but investors continue to digest the hawkish commentary from Fed officials last Friday. On Tuesday, the Forex pair broke sharply after a report showed U.S. consumer confidence surged to 101.1, beating the 97.2 estimate.

Later today, investors will get the opportunity to react to the latest U.S. ADP Non-Farm Employment Change report. It is expected to show the private sector added 174,000 jobs in August. Chicago PMI is expected to come in at 54.1, slightly below the previous 55.8. Pending Home Sales are expected to show a 0.7% increase.

AUD/USD Technical Analysis
Daily AUD/USD

Technically, the main trend is down according to the daily swing chart.

The main range is .7145 to .7755. Its retracement zone at .7520 to .7464 is currently being tested. Trader reaction to this zone will determine the near-term direction of the Aussie. Straddling the 50% level at .7520 means the AUD/USD is balanced between the June 16 bottom and the August 10 top.

Based on the current price at .7520, the direction of the AUD/USD the rest of the session will be determined by trader reaction to the 50% level at the same price.

Australian Dollar/U.S. Dollar Forex Pair
Daily AUDUSD Short-Term

A sustained move over .7520 will indicate the presence of buyers. This could drive the Aussie into a long-term uptrending angle at .7555. Overtaking this angle could create enough upside momentum to challenge the short-term 50% level at .7595 and the downtrending angle at .7605.

A sustained move under .7520 will signal the presence of sellers. The first major target is a long-term uptrending angle at .7500. The daily chart opens up to the downside under this angle with the next key target the Fibonacci level at .7464.

Watch the price action and read the order flow at .7520 the rest of the session. This will tell us if buyers or sellers are in control. Look for volatility following the release of the ADP report at 1215 GMT. A stronger-than-expected report should increase the odds of a Fed rate hike, driving up demand for the U.S. Dollar. A weaker-than-expected report should underpin the AUD/USD.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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