AUD/USD Forex Technical Analysis – August 21, 2017 Forecast

The AUD/USD is trading slightly lower early Monday. There are no major economic reports today in either the U.S. or Australia. The minor report from Australia at 1430 GMT is the Conference Board’s Leading Index.

Barring any political or geopolitical events, the primary market driver this week will be U.S. Treasury yields. Higher yields will tighten the spread between U.S. Treasury Bonds and Australian Government Bonds, making the U.S. Dollar a more attractive investment. Lower U.S. Treasury yields will make the Australian Dollar a more attractive asset.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7807 will signal a resumption of the downtrend. A move through .7962 will negate a closing price reversal top and indicate that momentum has shifted to the upside.

The main range is .7571 to .8065. Its retracement zone at .7818 to .7760 stopped the selling last week at .7807.

The intermediate range is .8065 to .7807. Its retracement zone at .7936 to .7966 stopped the rally last week at .7962. The closing price reversal top formed inside this zone also indicates that a potentially bearish secondary lower top may be forming.

The short-term range is .7807 to .7962. Its retracement zone is .7884 to .7866. This zone stopped the selling on Friday.

Forecast

Based on the current price at .7913 and the earlier price action, the direction of the AUD/USD today is likely to be determined by trader reaction to the intermediate 50% level at .7936.

A sustained move under .7936 will indicate the presence of sellers. This could drive the market into the short-term retracement zone at .7884 to .7866.

The daily chart opens up to the downside under .7866 with .7818 to .7807 the next downside target. A failure to hold .7807 could extend the break into .7760.

A sustained move over .7936 will signal the presence of buyers. This could lead to a test of the resistance cluster at .7962 to .7966. Overtaking .7966 could trigger an acceleration to the upside with an eventual test of the major top at .8065.

Watch the price action and read the order flow at .7936 all session. Trader reaction to this level will tell us if the buying or selling is getting stronger.