AUD/USD Forex Technical Analysis – May 29, 2019 Forecast

The Australian Dollar is edging lower on Wednesday with the currency posting a tight trading range for a third straight session. The inside trading range suggests investor indecision and impending volatility. Perhaps capping gains are a flare up of concerns over an escalation of the trade dispute between the United States and China.

Gains are also being limited by expectations of a weakening economy and at least one, maybe two Reserve Bank of Australia rate cuts. Underpinning the Aussie are worries about a Fed rate cut that are being telegraphed by the steep drop in U.S. Treasury yields.

At 08:46 GMT, the AUD/USD is trading .6917, down 0.0006 or -0.08%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending slightly higher. The market is in no position to turn the main trend to up, but a move through .6864 will signal a resumption of the downtrend.

The minor trend is up. It turned up on Monday when buyers took out .6935. However, the rally died at .6939, suggesting it was fueled by buy stops rather than aggressive buyers. A trade through .6864 will change the minor trend to down.

The short-term range is .6864 to .6939. Its 50% level or pivot at .6901 is controlling the near-term direction of the AUD/USD. Keep an eye on trader reaction to this level today. This will tell us if there is real buying in the market today.

On the upside, the nearest target is a resistance cluster at .6967. This is a combination of a short-term 50% level and a longer-term Fibonacci level. Taking out this level could lead to a serious upside breakout.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at .6906 and the uptrending Gann angle at .6894. In between these two angles is the short-term pivot at .6901.

Bullish Scenario

A sustained move over .6906 will suggest there is just enough buyers in there to lead to a potential rally through .6939 and into the resistance cluster t .6967.

Bearish Scenario

A move under .6906 will indicate the counter-trend buying is weakening. Taking out .6901 will indicate the selling is getting a little stronger, while a move to the weak side of the uptrending Gann angle at .6894 could trigger an acceleration to the downside with the bottoms at .6864 the nearest targets.