AUD/USD Forex Technical Analysis – Chart Pattern Suggests Impending Volatility, Key Pivot at .7397

The Australian Dollar is trading slightly lower at the mid-session of the U.S. trade. The market is attempting to reverse to the upside following early session weakness. The price action if being fueled by a volatile U.S. Dollar, a drop in interest rates and limited demand for risky assets.

Earlier in the session, China announced retaliatory tariffs of 25 percent on $16 billion worth of U.S. goods ranging from oil and steep products to autos and medical equipment, China’s Commerce Ministry said.

The U.S. Dollar initially rose following the announcement on safe-haven buying, pressuring the Chinese Yuan and the Australian Dollar.

At 1800 GMT, the AUD/USD is trading .7419, down 0.0006 or -0.08%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7465 will signal a resumption of the uptrend. The trend will turn to down on a move through .7318.

The minor trend is down. A trade through .7442 will change the minor trend to up and shift momentum to the upside.

Today’s inside move suggests investor indecision and impending volatility.

The major 50% level or pivot is .7397. This price has been controlling the price action and direction of the AUD/USD for about a month. Holding above it today will give the Forex pair an upside bias.

Daily Technical Forecast

Based on the current price at .7420, the direction of the AUD/USD into the close is likely to be determined by trader reaction to the downtrending Gann angle at .7415.

A sustained move over .7415 will indicate the presence of buyers. If this creates enough upside momentum, we could see a drive into the resistance cluster at .7440 then the minor top at .7442.

Overtaking .7442 will indicate the buying is getting stronger. This could lead to a test of the uptrending Gann angle at .7448. Crossing to the strong side of this angle will put the AUD/USD in a bullish position with the main top at .7465 the next likely upside target.

A sustained move under .7415 will signal the presence of sellers. This could trigger a break back to the pivot at .7397, followed by an uptrending Gann angle at .7383. This angle provided support on Monday, Tuesday and earlier today. If it fails then look for an acceleration to the downside with targets at .7351 and .7348.