AUD/USD Forex Technical Analysis – August 17, 2018 Forecast

The Australian Dollar is trading steady-to-higher early Friday under light volume. The Forex pair is trading inside yesterday’s range which suggests investor indecision and impending volatility.

At 0617 GMT, the AUD/USD is trading .7267, up 0.0006 or +0.06%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7202 will signal a resumption of the downtrend. The main trend will change to up on a move through .7453. Momentum shifted to the upside with the closing price reversal bottom on Wednesday and the subsequent confirmation on Thursday.

The minor trend is down. However, yesterday’s price action turned .7202 into a new minor bottom.

The short-term range is .7453 to .7202. If the counter-trend short-covering rally continues then look for a move into its retracement zone at .7328 to .7357. Since the main trend is down, sellers are likely to come in on a test of this zone.

Taking out .7202 will indicate the selling is getting stronger with the initial targets the December 23, 2016 main bottom at .7159 and the May 24, 2016 main bottom at .7145.

Daily Technical Forecast

Based on the early inside move, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to yesterday’s high at .7287.

A sustained move through .7287 will indicate the short-covering is getting stronger. If this move creates enough upside momentum then look for the rally to extend into the short-term 50% level at .7328, followed by the downtrending Gann angle at .7333. Look for a technical bounce on the first test of this area since the main trend is down.

The inability to overcome .7287 will signal the presence of sellers or weak buyers. Turning lower for the session will indicate the selling is getting stronger. If this move creates enough downside momentum then look for the selling to extend into the steep downtrending Gann angle at .7213. Crossing to the weak side of this angle will put the AUD/USD in a bearish position with .7202 the next downside target.