AUD/USD Forex Technical Analysis – February 11, 2016 Forecast

The AUD/USD posted an outside move early in the session, indicating trader indecision. The Forex pair essentially straddled a key retracement zone for the fifth consecutive day. This is also a sign that investors aren’t sure which way they want to take the market. Trader reaction to this retracement zone could help determine the direction of the market over the near-term.

The main trend is down according to the daily swing chart. The main top is .7327 to .6826. Its retracement zone is .7076 to .7136. This zone is controlling the near-term direction of the market.

Based on Wednesday’s close at .7093, the direction of the market today is likely to be determined by trader reaction to the 50% level at .7076.

A sustained move over .7076 will indicate the presence of buyers. This could generate a move to the upside since the next resistance cluster comes in at .7136 to .7142. This zone was tested early when the AUD/USD rallied up to .7152.

Taking out .7152 will indicate that the buying is getting stronger with potential Gann angle targets at .7192, .7217 and .7230. The latter is the last potential resistance angle before the .7242 main top.

A sustained move under .7076 will signal the presence of sellers. The first target is a price cluster formed by an uptrending angle at .7042 and a downtrending angle at .7037. This is followed by a longer-term uptrending angle at .7016. This is the last potential support angle before the .6973 main bottom.

A trade through .6973 will turn the main trend to down. This could create enough downside momentum to challenge the next uptrending angle at .6921.

The outside move formation had the AUD/USD testing both support and resistance under volatile circumstances. Although the pressure is to the downside today, ultimately the direction will be determined by trader reaction to the 50% level at .7976 and to the long-term uptrending angle at .7016.

Look for a bullish tone to develop on a sustained move over .7076 and a bearish tone to develop on a sustained move under .7016.