AUD/USD Forex Technical Analysis – Triangle Pattern Suggests Impending Volatility; Strengthens Over .6805, Weakens Under .6767

The Australian Dollar is under pressure on Wednesday as investors brace for the strong possibility of a rate cut by the Reserve Bank of Australia on October 1. On Tuesday, RBA governor Philip Lowe warned in a speech on the state of the global economy that Australia could not hold out if central banks across the world continued to reduce their interest rates.

At 08:58 GMT, the AUD/USD is trading .6778, down 0.0021 or -0.30%.

As of Tuesday’s close, the financial markets put the chance of a rate cut on October 1 at almost 80 percent with the same markets pricing in a 0.50 percent cash rate by early next year.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6688 will signal a resumption of the downtrend after a more than two week counter-trend move. A trade through .6895 will change the main trend to up.

The minor trend is also down. A trade through .6760 will reaffirm the minor downtrend.

The short-term range is .6688 to .6895. Its retracement zone at .6792 to .6767 is currently providing support. Aggressive counter-trend buyers are coming in on a test of this zone in an attempt to form a secondary higher bottom.

The minor range is .6895 to .6760. Its retracement zone at .6828 to .6843 is potential resistance.

Daily Technical Forecast

Based on the early price action and the current price at .6778, the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the short-term 50% level at .6792.

Bearish Scenario

A sustained move under .6792 will indicate the presence of sellers. The first downside target is a support cluster at .6768 to .6767, followed closely by last week’s low at .6760.

The low at .6760 is a potential trigger point for an acceleration to the downside with the next target angle coming in at .6728. This is the last potential support angle before the .6688 main bottom.

Bullish Scenario

A sustained move over .6792 will signal the presence of buyers. The first target angle comes in at .6805. This is a potential trigger point for an acceleration to the upside with the minor retracement zone at .6828 to .6843 the next major upside target.

Overview

Essentially, the AUD/USD is trading inside a triangle chart pattern. This typically indicates impending volatility. The trigger point for a downside breakout is .6767. An upside breakout could be triggered by a move through .6805.