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AUD/USD Forex Technical Analysis – September 26, 2016 Forecast

By:
James Hyerczyk

The AUD/USD is trading lower early in the session on light volume. U.S. equity markets are also trading weaker, suggesting the pressure on the Australian

australian-dollar

The AUD/USD is trading lower early in the session on light volume. U.S. equity markets are also trading weaker, suggesting the pressure on the Australian Dollar is coming from lower demand for higher-yielding assets. After last week’s surge was triggered by the Fed’s decision to leave interest rates unchanged, the market may be due for a risk-off session.

The lack of fresh economic news from Australia may also be weighing on prices. The schedule is also light in the U.S. with New Home Sales due at 1400 GMT. It is expected to show 598K units were added in August compared with 654K in July.

FOMC Member Daniel Tarullo is also scheduled to speak about bank regulation. He has stated in the past that he would support a rate hike if inflation were higher. If he doesn’t comment on the timing of the next rate hike then it will likely be a market moving event.

Volume may be light today because of Monday night’s presidential debates. The masses will be watching this event in the U.S. so it may be a market moving event early late Monday for traders in the U.S. and early Tuesday for traders in the Pacific Rim and Asia.

TECHNICAL ANALYSIS

daily-audusd
Daily AUD/USD

The main trend is down according to the daily swing chart. Momentum, however, has been to the upside for over a week. The main trend will turn up on a trade through .7732.

The price action is being controlled by a pair of retracement zones. The main range is .7732 to .7441. Its retracement zone is .7586 to .7621. Holding above this zone will give the market an upside bias. Currently, the AUD/USD is straddling the Fibonacci level at .7621.

The short-term range is .7441 to .7674. Its retracement zone at .7557 to .7530 will become the primary downside target if the selling pressure increases.

FORECAST

BASED ON THE CURRENT PRICE AT .7624, THE DIRECTION OF THE AUD/USD TODAY IS LIKELY TO BE DETERMINED BY THE PRICE CLUSTER AT .7621. THIS AREA IS A COMBINATION OF THE MAIN FIBONACCI LEVEL AND AN UPTRENDING ANGLE.

A SUSTAINED MOVE OVER .7621 WILL INDICATE THE PRESENCE OF BUYERS. IF VOLUME INCREASES ON THE MOVE THEN WE COULD SEE A RALLY INTO THE NEAREST DOWNTRENDING ANGLE AT .7672.

A SUSTAINED MOVE UNDER .7621 WILL SIGNAL THE PRESENCE OF SELLERS. THE INITIAL BREAK SHOULD BE LABORED BECAUSE OF A DOWNTRENDING ANGLE AT .7612. TAKING OUT THIS LEVEL, HOWEVER, IS LIKELY TO TRIGGER AN ACCELERATION INTO THE MAIN 50% LEVEL AT .7586. THIS IS FOLLOWED BY THE SHORT-TERM 50% LEVEL AT .7557.

WATCH THE PRICE ACTION AND READ THE ORDER FLOW AT .7621 TODAY. TRADER REACTION TO THIS PRICE CLUSTER WILL TELL US IF BUYERS ARE RETURNING, OR IF SELLERS ARE INCREASING PRESSURE.

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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