AUD/USD Forex Technical Analysis – September 27, 2016 Forecast

Risk aversion faded across the financial markets overnight after the presidential debates, fueling a rally in the higher-yielding currencies like the AUD/USD. If this is any indication then it means that the markets have decided that Democratic candidate Hillary Clinton did better than Republican candidate Donald Trump in a television debate.

This assessment of the debate was also confirmed by survey data which showed Clinton emerging as the clear winner with nearly 62 percent of voters giving an edge to the Democratic candidate over her Republican rival, who was deemed winner by only 27 percent, according to a new poll of voters who watched the debate.

The debates have to be talked about because they will affect market volatility until the general election the first week of volatility. The simple way to look at it is, Clinton is the frontrunner. We’ll see volatility to the upside if she wins the debates and volatility to the down side if Trump wins the debate.

The more confident the markets are in a Clinton victory, the greater the demand for risky assets such as stocks and higher-yielding currencies like the Aussie.

With the first debate out of the way, investors will now get the opportunity to go back to watching the impact of monetary policy on the markets and traditional day-to-day economic reports.

TECHNICAL ANALYSIS

Despite the current 10-day rally, the main trend is down according to the daily swing chart. It will turn up on a trade through the last main top at .7732. Momentum has been to the upside since the last main bottom was formed at .7441 on September 13.

We may or may not see a price surge when .7732 is taken out. Since we are so far from the support, taking it out will change the trend, but not necessarily lead to a huge breakout to the upside. The market may take out buy stops at first then pull-back into a value area in order to attract new buying.

There would have to be some extremely bullish news coming out in order for the AUD/USD to take out .7732 and just keep going. So be careful buying strength on a move through .7732. You can play for a spike through this price, but you may not get a prolonged rally initially.

Counter-trend sellers may want to sell into this top, or let the stops get triggered then sell on the way back through this level. Either way, just note it is a key level to watch.

FORECAST

BASED ON THE CURRENT PRICE AT .7668 AND THE EARLIER PRICE ACTION, THE DIRECTION OF THE AUD/USD THE REST OF THE SESSION IS LIKELY TO BE DETERMINED BY TRADER REACTION TO THE SHORT-TERM DOWNTRENDING ANGLE AT .7667.

A SUSTAINED MOVE OVER .7667 WILL INDICATE THE BUYING IS STILL STRONG WITH THE ANGLE AT .7700 THE NEXT TARGET. THIS IS THE LAST POTENTIAL RESISTANCE ANGLE BEFORE THE .7732 MAIN TOP.

A SUSTAINED MOVE UNDER .7667 WILL SIGNAL THE PRESENCE OF SELLERS. THIS COULD LEAD TO A QUICK BREAK INTO AN UPTRENDING ANGLE AT .7641.

THE DAILY CHART OPENS UP TO THE DOWNSIDE UNDER .7641 SO BE PREPARED FOR A POSSIBLE ACCELERATION TO THE DOWNSIDE.

WE ARE IN THE WINDOW OF TIME FOR A CLOSING PRICE REVERSAL TOP SO WATCH FOR DANGER ON A BREAK BACK INTO YESTERDAY’S CLOSE AT .7635.