AUD/USD Forex Technical Analysis – March 6, 2018 Forecast

The AUD/USD is trading lower on Tuesday after giving up its earlier gains. Traders are responding to the Current Account and Retail Sales report as well as the latest interest rate decision and monetary policy statement by the Reserve Bank of Australia.

The Current Account came in worse than expected at -14.0 Billion, missing the -12.3 Billion estimate. The previous report was revised lower to -11.0 Billion. Monthly Retail Sales came in at 0.1%, missing the 0.4% estimate. However, it was a marked improvement from the previously reported -0.5%.

The Reserve Bank of Australia kept its official cash rate on hold for its second meeting of the year, marking 19 months in a row at its record low of 1.5 percent. Traders also said that based on the state of the economy, rates are unlikely to rise until some time next year.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending slightly higher due to the change in the minor trend to up. A move through .7712 will signal a resumption of the downtrend.

The market is currently trading inside a major retracement zone, bounded by .7818 to .7743. Trader reaction to this zone will determine the longer-term direction of the AUD/USD.

The short-term range is .7988 to .7712. If the upside momentum continues then we could see a rally into its retracement zone at .7850 to .7883.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD is likely to be determined by trader reaction to the downtrending Gann angle at .7748.

A sustained move over .7748 will indicate the presence of buyers. If this move generates enough upside momentum, we could see a drive into a long-term uptrending Gann angle at .7802. Overcoming this angle could drive prices into the major 50% level at .7818.

Crossing to the bullish side of the 50% level at .7818 will indicate the buying is getting stronger with .7850 to .7883 the next likely upside target. Since the main trend is down, sellers are likely to show up on a test of this area.

A sustained move under .7748 will signal the presence of sellers. Crossing to the weak side of the Fibonacci level at .7743 will indicate the selling is getting stronger. This could lead to a test of last week’s low at .7712. This price is the trigger point for an acceleration to the downside.