AUD/USD Forex Technical Analysis – Weekly Inside Move Suggests Investor Indecision, Impending Volatility

The Australian Dollar is trading nearly flat for the week. The currency is being underpinned by a better performance in U.S. and China stock markets, but economic concerns are keeping a lid on any rallies. Early Wednesday, the government announced weaker than expected inflation data. CPI figures reveal a 0.4% increase versus estimates of 0.5%.

At 0656 GMT, the AUD/USD is trading .7097, down 0.0011 or -0.14%. As of Tuesday’s close, the AUD/USD was trading .7107, up 0.0020 or +0.28%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. A trade through .7020 will signal a resumption of the downtrend. If this move creates enough downside momentum then we could see an eventual test of the next major bottom at .6826.

The main trend will change to up on a trade through .7314.

The minor trend is down. A trade through .7160 will change the minor trend to up. This will also shift momentum to the upside with .7314 the next upside target.

The short-term range is .7314 to .7020. Its retracement zone at .7167 to .7202 is the first upside target. Since the main trend is down, sellers are likely to show up on the first test of this zone.

The main range is .7484 to .7020. Its retracement zone at .7252 to .7307 is the next major upside target.

Weekly Swing Chart Technical Forecast

Based on the price action this week and the inside move, the direction of the AUD/USD the rest of the week is likely to be determined by trader reaction to last week’s high at .7126 and last week’s low at .7020.

A sustained move over .7126 will indicate the presence of buyers. This could trigger a quick rally into a series of potential resistance levels at .7160, .7167 and .7202. The initial rally is likely to be labored until these levels are cleared.

A sustained move under .7020 will signal the presence of sellers. The weekly chart is wide open under this level with the January 15, 2016 main bottom at .6826 the next major downside target.