AUD/USD Forex Technical Analysis – Sustained Move Under .8045 Pivot Will Be Sign of Weakness

The AUD/USD is trading slightly lower shortly before the Fed’s interest rate decision and monetary policy announcement at 1900 GMT.

The Fed is widely expected to leave its benchmark interest rate unchanged. Traders will be looking for hints in the monetary policy statement for information on the timing and the number of rate hikes this year as well as any comments on inflation.

Earlier in the session, Australian consumer inflation came in slightly lower than expected. This likely means the Reserve Bank of Australia won’t be raising rates anytime soon.

In the U.S., the ADP jobs report said the private sector added 234,000 jobs in January. Traders were looking for a gain of 185,000. The Chicago PMI fell slightly in January, and pending home sales rose 0.5 percent in December.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, the Forex pair has been moving sideways and inside Friday’s wide range since last Friday. This suggests investor indecision and impending volatility.

A trade through .8135 will signal a resumption of the uptrend with the next two targets the May 14, 2015 main top at .8162 and the major 50% level at .8165. The latter is the trigger point for an acceleration to the upside.

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

The short-term range is .7956 to .8135. Its 50% level or pivot is .8045. This level is controlling the short-term direction of the market.

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

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD will be determined by trader reaction to a short-term uptrending Gann angle at .8076.

A sustained move over .8076 will indicate the presence of buyers. This could drive the AUD/USD into the uptrending Gann angle at .8127, followed by the high at .8135.  Taking out this level will reaffirm the uptrend with the next two targets coming in at .8162 and .8165.

A sustained move under .8076 will signal the presence of sellers. This could drive the market into an uptrending Gann angle at .8016.

Taking out .8016 could trigger a move into the support cluster at .7971 to .7967.