AUD/USD Forex Technical Analysis – June 21, 2018 Forecast

The AUD/USD finished lower but inside yesterday’s range, suggesting investor indecision and impending volatility. Traders are still on edge over the threat of additional tariffs from the U.S. against China and the possible retaliation from Beijing. However, the price action indicates cooler heads may be prevailing as the trade negotiations between the two major economies continue.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7347 will signal a resumption of the downtrend. The Forex pair isn’t close to turning the main trend to up, but it is in the window of time for a potentially bullish closing price reversal bottom.

Daily Technical Forecast

Based on Wednesday’s close at .7369, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the June 2, 2017 main bottom at .7372.

A sustained move over .7372 will indicate the presence of buyers. This could drive the market into a long-term uptrending Gann angle at .7399. Overtaking the Gann angle will indicate the buying or short-covering is getting stronger. This could generate the upside momentum needed to challenge the downtrending Gann angle at .7457. Since the main trend is down, sellers are likely to come in on a test of this angle.

A sustained move under .7372 will signal the presence of sellers. This could lead to a test of the low of the week at .7347, followed by the May 9, 2017 main bottom at .7329.

A failure to hold .7329 could trigger an acceleration into another long-term uptrending Gann angle at .7279. This is the last potential support angle before the .7159 main bottom.

The longer-term trend is down because of the divergence between the monetary policies of the hawkish U.S. Federal Reserve and the dovish Reserve Bank of Australia. The short-term trend is being driven by worries over a trade war and the lack of demand for risky assets. If these concerns dissipate, it’s possible we’ll see a short-term counter-trend rally. The best sign of strength will be overcoming .7399.