AUD/USD Forex Technical Analysis – August 23, 2017 Forecast

The AUD/USD is trading lower, but mounting a comeback. Volume and volatility are low so a two-sided trade is possible. The price action suggests investors are squaring positions ahead of the start of the central banker speeches at the symposium at Jackson Hole, Wyoming.

There are a few U.S. economic reports today including Flash Manufacturing PMI, Flash Services PMI and New Home Sales, but the biggest reaction from traders is likely to come from the speech by U.S. Federal Reserve FOMC Member Robert Kaplan at 1305 GMT.

Just last week, Dallas Fed President Kaplan called for patience on another rate hike, saying he’d like to see more progress on inflation moving to its 2% target. He does, however, appear to be on board with beginning paring the Fed’s balance sheet “in the near future” – i.e. September.

These comments were perceived as dovish so he is widely expected to continue down that path on Wednesday. This may put pressure on U.S. Treasury yields, supporting the AUD/USD.

Any more friendly talk about tax reform or infrastructure spending could be positive for the U.S. Dollar.

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 the closing price reversal top. This would signal a shift in momentum to the upside.

The main range is .8065 to .7807. Its retracement zone at .7936 to .7966 is acting like resistance.

The short-term range is .7807 to .7962. Its retracement zone at .7884 to .7866 is acting like support.

Forecast

Based on the current price at .7905 and the earlier price action, the key support is .7884, followed by a cluster of numbers at .7875, .7867 and .7866.

If .7866 fails as support then look for a break into .7837, followed by .7822, .7818 and .7807.

There is room to the upside with the next target coming in at .7936, followed by a resistance cluster at .7966 to .7970.

We’re looking for a range bound trade, but there may be a volatile reaction to Kaplan’s speech at 1305 GMT so traders should be prepared for the possibility of whip-saw price action.