AUD/USD Forex Technical Analysis – August 21, 2019 Forecast

The Australian Dollar is at a virtual standstill on Wednesday as traders await the release of key U.S. central bank minutes later in the day and several speeches from prominent central bankers on Friday. Traders could still be digesting the minutes from the Reserve Bank of Australia (RBA) released on Tuesday. They offered nothing new, while reiterating that policymakers are willing to “wait and see” and will lower rates “if needed”.

At 08:15 GMT, the AUD/USD is trading .6782, up 0.0004 or +0.06%.

At 18:00 GMT, the U.S. Federal Reserve will release the minutes of its July 30-31 monetary policy meeting. At that meeting, the Fed lowered its benchmark rate by a quarter point as an insurance policy not against what’s wrong with the economy now, but what could go wrong in the future.

In approving the rate cut, the Federal Open Market Committee cited “implications of global developments for the economic outlook as well as muted inflation pressures.” The committee called the current state of growth “moderate” and the labor market “strong,” but decided to loosen policy anyway.

The Fed minutes are going to have to be extremely dovish or extremely hawkish to move the AUD/USD as most traders are more interested in what Fed Chair Jerome Powell has to say in his speech on Friday.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The AUD/USD is in no position to turn the main trend to up, but there is room for a normal 50% to 61.8% retracement. A trade through .6677 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .6821 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is .6677 to .6821. Its 50% level or pivot at .6749 has been providing support for 10 straight sessions.

The main range is .7082 to .6677. Its retracement zone at .6880 to .6927 is the primary upside target.

Daily Technical Forecast

Based on the early price action and the current price at .6782, the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the uptrending Gann angle at .6777.

Bullish Scenario

A sustained move over .6777 will indicate the presence of buyers. If this can create enough upside momentum to claw through a number of highs then we could see a test of the minor top at .6821.

Taking out .6821 will change the minor trend to up with the next target angle coming in at .6852. This is the last potential resistance angle before the main 50% level at .6880.

Bearish Scenario

A sustained move under .6777 will signal the presence of sellers. This could trigger a break into the pivot at .6749. Look for the selling pressure to increase under this level with the first target angle .6727, followed by another uptrending Gann angle at .6702. This is the last potential support angle before the .6677 main bottom.