AUD/USD Forex Technical Analysis – May 24, 2016 Forecast

The AUD/USD fell to a 2 ½-month low on Tuesday as sellers reacted to the possibility of an interest rate cut by the Reserve Bank of Australia, after Governor Glenn Stevens said the central bank was committed to an inflation-targeting policy.

Technically, the main trend is down according to the daily swing chart. The downtrend resumed when the swing bottom at .7175 was taken out. The new swing top is .7259. The trend will turn up on a trade through this level. The next swing chart target is the February 29 bottom at .7107.

The main range is .6826 to .7834. Its retracement zone is .7330 to .7211. The market is currently trading on the weak side of this retracement zone, adding further to the downside bias.

The current price is .7155. The nearest resistance is the former bottom at .7175. Overcoming this level will indicate short-covering is taking place. This could create enough upside momentum to challenge the main Fibonacci level at .7211.

A sustained move under .7175 will indicate the presence of sellers. The daily chart is open to the downside with the next target the main bottom at .7107. This is followed by a long-term uptrending angle at .7056.

Look for the downside bias to continue today as long as the AUD/USD remains under .7175. Don’t be surprised if the range begins to expand to the downside.