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AUD/USD Forex Technical Analysis – Bearish Under .7743 Fibonacci Level With Plenty of Room to Downside

By:
James Hyerczyk
Published: Mar 21, 2018, 16:57 UTC

The Australian Dollar is not a complicated currency to trade at this time. The fundamentals are bearish with the Fed set to raise interest rates and the Reserve Bank of Australia in no hurry to hike its benchmark rate.

AUD/USD

Sellers continued to dominate the AUD/USD shortly before the Federal Reserve’s announcements at 1800 GMT. Also weighing on the Australian Dollar is the news that the White House plans to announce a package of tariffs Thursday penalizing China for intellectual property theft.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The Forex pair is not in a position to change the trend to up, but investors should watch for a possible closing price reversal bottom due to the steepness of the current sell-off and short-term oversold conditions.

The main range is .7501 to .8135. Its 50% to 61.8% retracement zone is .7818 to .7743. This zone is controlling the longer-term direction of the market. Trading below this zone is contributing to the downside bias.

AUDUSD
Daily AUD/USD

Daily Swing Chart Technical Forecast

The Australian Dollar is not a complicated currency to trade at this time. The fundamentals are bearish with the Fed set to raise interest rates and the Reserve Bank of Australia in no hurry to hike its benchmark rate.

The main trend is down according to the daily swing chart, the Forex pair is trading on the weak side of a major retracement zone and there is plenty of room to the downside. It makes sense to continue to look at the short side.

The Fed announcements may already be priced into the market, but we could still see some surprises. If you like volatility then by all means have at it. However, just remember volatility is not direction so we could see a volatile two-sided trade or a volatile countertrend move.

Traders may also be looking ahead to Thursday when the U.S. is set to announce its sanctions against China. China will probably follow shortly with its own sanctions against the U.S. Trade wars with China could also trigger a volatile reaction.

We’re looking at the short side because there is plenty of room to break with .7501 the next major downside target.

Recovering .7712 will be the first sign that the buying may be stronger than the selling at current price levels. Overcoming .7743 will indicate the short-covering or speculative buying is getting stronger. If this generates enough upside momentum then .7818 will become the next major target.

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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