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AUD/USD Forex Technical Analysis – August 23, 2018 Forecast

By:
James Hyerczyk
Published: Aug 23, 2018, 07:14 UTC

Based on the early price action, the direction of the AUD/USD the rest of the day is likely to be determined by trader reaction to the short-term 50% level at .7292.

AUD/USD

Sellers are hitting the Australian Dollar hard early Thursday amid more political chaos in Canberra. The Aussie failed to gain traction late Wednesday and early Thursday following the release of the U.S. Fed minutes, which revealed nothing new. Aussie traders also failed to respond to a generally weaker U.S. Dollar and strong domestic construction work data.

At 0639 GMT, the AUD/USD settled at .7299, down 0.0053 or -0.74%.

Political developments are clearly driving the price action today. Traders are saying an upcoming leadership battle and the fear of a snap election are responsible for the selling pressure.

AUDUSD
Daily AUD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. The recent four-session rally did not change the trend. It was merely a correction in a bear market in reaction to the easing of tensions in Turkey.

A trade through .7202 will signal a resumption of the downtrend. The main trend will change to up on a trade through .7453.

The minor trend is also down. A new minor top has formed at .7382. A trade through this level will change the minor trend to up.

The main range is .7453 to .7202. Its retracement zone at .7328 to .7357 is resistance.

The short-term range is .7202 to .7382. Its retracement zone at .7292 to .7271 is currently being tested. This zone is important because aggressive counter-trend buyers may try to form a secondary higher bottom, while trend traders are going to try to take out this zone in an effort to make .7382 a new lower top and challenge the main bottom at .7202.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD the rest of the day is likely to be determined by trader reaction to the short-term 50% level at .7292.

A sustained move over .7292 will indicate the presence of aggressive counter-trend buyers. If this move can generate enough short-covering pressure then we could see a retest of an uptrending Gann angle at .7322 and a 50% level at .7328. The main resistance is a downtrending Gann angle at .7353.

A sustained move under .7292 will signal the presence of sellers. This could drive the AUD/USD into the Fib at .7271, followed closely by an uptrending Gann angle at .7262. This angle is the trigger point for an acceleration into .7232. This is the last potential support angle before the .7202 main bottom.

We’re in a news driven market so volatility is heightened. The news is bearish so continue to sell rallies until events change.

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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