AUD/USD Forex Technical Analysis – April 27, 2017 Forecast

The AUD/USD is trading slightly lower on Thursday after an early session rally failed to draw enough buyers to sustain the move. This suggests the rally was likely fueled by short-covering rather than new buying.

The short-covering was sparked by a technical bounce off of a major 50% level and the U.S. Dollar’s failure to rally following the release of President Trump’s widely anticipated tax reform plan.

The bearish tone driving the Australian Dollar lower is being fueled by the weaker-than-expected consumer inflation data released earlier in the week. This likely means the Reserve Bank of Australia will keep rates low for a longer period of time than previously expected. This is bearish news.

Technical Analysis

The main trend is down according to the daily swing chart. The only thing holding this Forex pair higher is a pair of longer-term 50% levels at .7468 and .7454.

Forecast

Based on the current price at .7465 and the earlier price action, the direction of the AUD/USD is likely to be determined by trader reaction to the 50% level at .7468.

A sustained move under .7468 will signal the presence of sellers. This could trigger a fast move into the next 50% level at .7454.

If .7454 fails to hold then lookout to the downside since the next major target doesn’t come in until .7384.

Holding above .7468 will indicate the presence of buyers. If they can build a support base then there may be enough upside momentum generated to challenge the nearest target angle at .7530. Since the fundamentals are bearish, we’re likely to see renewed selling pressure on a test of this angle.

Watch the price action and read the order flow at .7468 early in the session. Trader reaction to this level will determine the direction of the market today.