AUD/USD Forex Technical Analysis – February 12, 2016 Forecast

The AUD/USD is trading flat after posting an outside move on Thursday in a tumultuous session. Yesterday’s price action was fueled by volatility in the commodity and equity markets after Congressional testimony by U.S. Federal Reserve Chair Janet Yellen signaled the pessimistic alarm. Investors dumped U.S. Dollars most of the session amid bets the U.S. central bank could be done raising interest rates.

Technically, the main trend is down according to the daily swing chart. However, momentum has swung to the upside since February 9. A trade through .7242 will change the main trend to up. A move through .6973 will signal a resumption of the downtrend.

The main range is .7327 to .6826. Its retracement zone is .7076 to .7136. The market has been straddling this zone all week and is currently trading inside it. For longer-term traders, it looks like an upside bias is likely to develop on a sustained move over .7136 and a downside bias on a sustained move under .7076.

Based on yesterday’s close at .7107 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the short-term downtrending angle at .7122.

A sustained move over .7122 will indicate the presence of buyers. This is followed by the Fibonacci level at .7136.

Taking out .7136 is likely to trigger an acceleration to the upside with the next target a downtrending angle at .7182. This is followed by angles at .7212 and .7227. The latter is the last potential resistance angle before the .7242 main top.

A sustained move under .7122 will signal the presence of sellers. The first downside target is the 50% level at .7076. Taking out this price could trigger an acceleration into a pair of uptrending angles at .7047 and .7026. This is followed by the main bottom at .6973.

The current price action suggests we could be looking at a sideways trade today as long as the AUD/USD remains inside .7136 to .7076.