AUD/USD Forex Technical Analysis – May 30, 2016 Forecast

The AUD/USD finished lower on Friday after Fed Chair Janet Yellen said an interest rate hike is “probably” appropriate in the coming months if economic data improve.

“It’s appropriate, and I’ve said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate,” she said in response to a question at Harvard’s Radcliffe Institute for Advanced Study.

“The economy is continuing to improve,” Yellen said, adding that she sees growth picking up after a sluggish first quarter. Yellen added that oil prices and the dollar are “roughly stabilizing,” which would help to push inflation toward the Fed’s goal.

Technically, the main trend is down according to the daily swing chart. The main trend will turn up on a trade through the last swing top at .7259. A trade through the last swing bottom at .7145 will signal a resumption of the downtrend.

The short-term range is .7259 to .7145. Its 50% level or pivot is .7202. This price is controlling the short-term direction of the market. A long-term Fibonacci level comes in at .7211. This price is also acting like a major pivot.

Based on the close at .7183, the direction of the market is likely to be determined by trader reaction to the uptrending angle at .7185.

A sustained move over .7185 will signal the presence of buyers. This could create enough upside momentum to challenge the short-term pivot at .7202. This is followed by the resistance cluster at .7209 to .7211. This cluster is the best resistance today so look for a technical bounce on the first test of this area.

A sustained move under .7185 will indicate the presence of sellers. This could trigger a break into the next uptrending angle at .7165. The last potential support angle before the .7145 main bottom comes in at .7155.

The downside momentum is expected to continue because of the late break on Friday, however, today is a U.S bank holiday so we could see light volume and a possible two-sided trade because of the thin-trading conditions.