AUD/USD Forex Technical Analysis – Inside Move Indicates Investor Indecision Ahead of Australian CPI Data

The AUD/USD closed lower on Monday while posting an inside move. A rebound in the U.S. Dollar was behind the weakness. Position-squaring ahead of President Trump’s first State of the Union speech and the Australian consumer inflation report may have been the catalysts behind some of the selling pressure.

Daily Technical Analysis

The main trend is up according to the daily swing chart. Monday’s inside move suggests investor indecision and impending volatility. A trade through .8135 will signal a resumption of the uptrend. This could lead to a test of the May 4, 2015 main top at .8162 and the main 50% level at .8165.

A trade through .7956 will change the main trend to down.

The short-term range is .7807 to .8135. Its retracement zone at .7971 to .7932 is the primary downside target.

Daily Technical Forecast

Based on Monday’s close at .8095 and the early price action, the direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the uptrending Gann angle at .8107.

Overtaking .8107 and sustaining the move will signal the presence of buyers. This could generate the upside momentum needed to challenge .8135, followed closely by .8162 and .8165.

A sustained move under .8107 will indicate the presence of sellers. This could trigger a fast break into the next uptrending Gann angle at .8056. We could see a technical bounce on the first test of this level.

The angle at .8056 is also the trigger point for an acceleration into an angle at .8106. This is another potential trigger point for a sharp break into the short-term 50% level at .7971, followed closely by an uptrending Gann angle at .7957.

Since the major news is coming out late Tuesday/early Wednesday, prices could straddle the angle at .8107 throughout the session. If volatility is below average, try to avoid getting caught in a two-sided market.