Advertisement
Advertisement

AUD/USD Forex Technical Analysis – May 31, 2016 Forecast

By:
James Hyerczyk
Published: May 31, 2016, 03:45 UTC

The AUD/USD surged early Tuesday as investors returned after Monday’s U.S. bank holiday. The rally was likely related to position-squaring and

Australian Dollar

The AUD/USD surged early Tuesday as investors returned after Monday’s U.S. bank holiday. The rally was likely related to position-squaring and profit-taking following last Friday’s comments from Fed Chair Janet Yellen and ahead of the U.S. Non-Farm Payrolls report later this week.

Daily AUD/USD

The main trend is down according to the daily swing chart, however, today’s surge indicates that momentum may be shifting to the upside. A trade through .7259 will turn the main trend to up.

The short-term range is .7259 to .7145. Its 50% level or pivot is at .7202.

Based on the current price at .7239, the direction of the market today is likely to be determined by trader reaction to the downtrending angle at .7244. This could create enough upside momentum to challenge the main top at .7259.

Taking out .7259 will change the main trend to up and likely trigger a rally into the major downtrending angle at .7274. This angle has guided the Aussie lower since the .7834 main top on April 21 so taking it out with conviction will indicate a major shift in investor sentiment. This may trigger an acceleration into the major 50% level at .7330.

The inability to overcome the angle at .7244 will indicate the presence of sellers. This could trigger an intraday retracement into the major Fibonacci level at .7211, followed closely by the short-term pivot at .7202.

Watch the price action and read the order flow at .7244 the rest of the day. Trader reaction to this angle will tell us if the short-covering will continue, or if sellers are regaining control.

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.

Did you find this article useful?

Advertisement