AUD/USD Forex Technical Analysis – February 9, 2016 Forecast

The AUD/USD is trading lower, but making a comeback after an early session sell-off drove it into a key short-term retracement. The current price action suggests the market may be consolidating since there are no major economic releases today. Additionally, traders may be squaring positions ahead of Fed Chair Janet Yellen’s testimony before Congress on Wednesday, February 10. Yellen is expected to be grilled by the financial committee about the current state of the economy and the future of any additional rate hikes.

Technically, the main trend is up according to the daily swing chart. The trend will turn down on a trade through .7002.

The main range is .7327 to .6826. Its retracement zone at .7076 to .7136 is currently acting like resistance.

The short-term range is .6826 to .7242. Its retracement zone is .7034 to .6985. This zone, which is the primary downside target, was tested earlier in the session. Since the main trend is up, buyers may come in on a test of this zone.

Based on Monday’s close at .7084 and the earlier price action, the direction of the market is likely to be determined by trader reaction to the main 50% level at .7076.

A sustained move under .7076 will indicate the presence of sellers. The first target is the short-term 50% level at .7034. This is followed by a short-term uptrending angle at .7017. This angle was tested earlier today, triggering a technical bounce.

If .7076 fails then look for the break to extend into the longer-term uptrending angle at .6996. This is followed closely by the short-term Fib level at .6985. This level is the trigger point for an acceleration to the downside with .6917 the next target.

Now that we’ve seen a technical bounce near two support levels, we have to look at the upside. A sustained move over .7076 will signal the presence of buyers. The first two upside targets are a downtrending angle at .7122 and the major Fibonacci level at .7136.

Watch the price action and order flow at .7076 on the upside and .7034 on the downside. A sustained move over .7076 will give the market an upside bias. A sustained move under .7034 will give the market a downside bias into the close. Trading between this levels will indicate investor indecision.