AUD/USD Forex Technical Analysis – December 18, 2015 Forecast

The AUD/USD tried to rally early during Thursday’s session, but sellers came in heavy in reaction to Wednesday’s Fed interest rate hike and its impact on the U.S. Dollar. Current data also indicates that overall retail positions are once again net-long the Australian Dollar for the first time since mid-November. If you’re a contrarian then this means we should expect further weakness over the near-term.

Technically, the main trend is down according to the daily swing chart. The market also closed on the weak side of a key retracement zone, giving the Forex pair a downside bias.

The main range is .7015 to .7384. Its retracement zone is .71995 to .7156. After serving as support for several weeks, these two levels are now new resistance.

Based on Thursday’s close at .7127, the direction of the market today is likely to be determined by trader reaction to the price cluster at .7155 to .7156.

Crossing to the bullish side of the Fibonacci level at .7156 will indicate the presence of buyers. This could trigger a rally into a downtrending angle at .7184. This is followed closely by the 50% level at .71995.

The inability to overcome .7156 and a sustained move under .7155 will signal the presence of sellers. The daily chart indicates there is room to the downside with yesterday’s low at .7096 the first downside target. This is followed by an uptrending angle at .7085. This is the last potential support angle before the .7015 main bottom.

Watch the price action and read the order flow at .7155 to .7156 if tested. Look for a bullish tone to develop on a sustained move over .7156 and a bearish tone to develop on a sustained move under .7155.