AUD/USD Forex Technical Analysis – August 15, 2017 Forecast

The AUD/USD is trading slightly higher on Tuesday despite a warning from the Reserve Bank of Australia that a rising Australia Dollar would curtail hopes for stronger economic growth and higher inflation over time.

According to the minutes of its August 1 policy meeting, when the RBA decided to leave interest rates unchanged at a record low of 1.5 percent, the central bank said the Australian Dollar is a key source of uncertainty for the future. This essentially served as a warning over the dollar’s strength.

“A further appreciation of the Australian Dollar would be expected to result in a slower pick-up in inflation and economic activity than currently forecast,” it said.

The RBA also forecast this month the economy will soon be growing at a robust 3 percent on-year rate, adding the bet assumes no major shift in the Aussie Dollar.

“This assumption was one source of uncertainty,” it added.

Technical Analysis

The main trend is down according to the daily swing chart. However, the closing price reversal bottom at .7838 on August 11 has temporarily curtailed the downside momentum.

A trade through .7838 will negate the closing price reversal bottom at signal a resumption of the downtrend.  A move through .7918 will signal a shift in momentum to the upside, but not a change in trend.

The main range is .7571 to .8065. If the selling pressure continues then its retracement zone at .7818 to .7760 will become the primary downside target.

The short-term range is .8065 to .7838. A shift in momentum could fuel a rally into its retracement zone at .7951 to .7978.

Forecast

Based on the current price at .7858, the direction of the AUD/USD the rest of the session will be determined by trader reaction to the long-term uptrending angle at .7861.

A sustained move over .7861 will indicate the presence of buyers. This could create enough upside momentum to challenge the next downtrending angle at .7935, followed by the retracement zone at .7951 to .7978.

A sustained move under .7861 will signal the presence of sellers. This could lead to a quick break into the major 50% level at .7818.

Crossing to the weak side of the downtrending angle at .7805 will indicate the selling is getting stronger with the next target the Fibonacci level at .7760.

Watch the price action and read the order flow at .7861 all day. This will tell us if the buyers or sellers are in control.