AUD/USD Forex Technical Analysis – August 20, 2015 Forecast

The AUD/USD initially rallied following the release of the latest Fed minutes yesterday, but the Forex pair has since weakened. Risk aversion is the reason behind the weakness with investors blaming falling commodity prices and worries about slowing growth in China for the selling pressure.

The minutes of the Fed’s latest monetary policy meeting revealed that most members believed conditions for raising interest rates were approaching, but not yet achieved. However, a September rate hike cannot be taken off the table yet.

Technically, the main trend is down according to the daily swing chart. The main trend will turn up on a trade through the .7439 swing top.

The short-term range is .7439 to .7215. Its 50% or pivot is .7327. This price is controlling the short-term direction of the market. Trader reaction to this pivot will determine the tone for the session. Currently, it is trading below this level, giving it a bias to the downside.

Given the current price at .7327, the first downside target is an uptrending angle at .7275. A break through this angle could trigger a sell-off into the next angle at .7245. This is the last major uptrending angle before the .7215 main bottom.

Crossing to the strong side of the pivot at .7327 will signal the presence of buying. Look for the rally to pick up steam on a sustained move over the uptrending angle at .7335.

The first upside target is a pair of downtrending angles at .7369 and .7377. This is followed closely by a long-term downtrending angle at .7398. This level will act like resistance on the initial test, but it is also a trigger point for an acceleration to the upside with the next target coming in at .7398.

Watch the price action and read the order flow if .7327 is tested. This will tell us whether the bulls or the bears control the market.