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AUD/USD Forex Technical Analysis – May 2, 2016 Forecast

By:
James Hyerczyk
Published: May 2, 2016, 11:09 UTC

The Australian Dollar is trading higher, boosted by a weaker U.S. Dollar, expanding manufacturing and position-squaring ahead of the Reserve Bank’s

AUD/USD Forex Technical Analysis – May 2, 2016 Forecast

The Australian Dollar is trading higher, boosted by a weaker U.S. Dollar, expanding manufacturing and position-squaring ahead of the Reserve Bank’s monetary policy committee meeting. The AUD/USD is currently trading at .7634, up -0.0026 or +0.37%.

The U.S. Dollar continued to lose ground against the Aussie as investors turned more bearish because of last week’s weaker-than-expected economic data and the Fed’s dovish monetary policy statement.

Earlier today, Australia reported that its manufacturing sector expanded for a 10th consecutive month, despite the rising Australian Dollar. The Australian Industry Group’s performance index dropped 4.7 points to 53.4 in April, but the index remains above the 50-level, indicating that the sector is expanding.

On Tuesday, the RBA meets to decide monetary policy. Because of the recent drop in consumer inflation, there is likely to be a heated debate about whether to lower interest rates.

Daily AUD/USD

Technically, the main trend is up according to the daily swing chart. The main trend will turn down on a trade through .7491.

The intermediate range is .7491 to .7834. Its retracement zone is .7663 to .7622. This zone is currently being tested along with a major Fibonacci level at .7608.

The short-term range is .7834 to .7548. Its retracement zone at .7691 to .7725 is the primary upside target.

Based on the current price at .7634, the direction of the market the rest of the session is likely to be determined by trader reaction to the intermediate pivot at .7622.

A sustained move over .7622 will indicate the presence of buyers. This could create enough upside momentum to challenge the intermediate 50% level at .7663. This is followed by a resistance cluster at .7691 to .7694.

A sustained move under .7622 will signal the presence of sellers. The first downside target is the major Fib level at .7608. This is followed by a series of long-term uptrending angles at .7586, .7563 and .7557.

Taking out .7557 and the low at .7548 will indicate a serious shift in investor sentiment which could trigger an acceleration to the downside.

 

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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