AUD/USD Forex Technical Analysis – December 5, 2016 Forecast

The AUD/USD is trading steady early Monday. The market broke shortly after the opening, but buyers quickly came in to stop the price slide, taking the Forex pair only marginally higher before running into resistance. The volume is light and the range is inside Friday’s range. This suggests trader indecision and impending volatility. Traders can’t seem to figure out how to play the Italian Referendum news.

Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is to the upside. A trade through .7497 will turn the main trend to up according to the daily swing chart. This move will make .7369 a new main bottom.

If there is no rally through .7497 then sellers may take a shot at .7369. Taking out this level will signal a resumption of the downtrend with the next target the November 21 bottom at .7311.

The main range is .7145 to .7777. Its retracement zone is .7461 to .7386. The market is currently straddling this zone. Trader reaction to this zone will likely set the tone for the market over the near-term.

The short-term range is .7777 to .7311. If there is a breakout to the upside then the next target is its retracement zone at .7544 to .7599.

Forecast

Based on the current price at .7447, the direction of the market today is likely to be determined by trader reaction to the main 50% level at .7461.

A sustained move over .7461 will signal the presence of buyers. This could generate enough upside momentum to challenge the main top at .7497 and the uptrending angle at .7511.

Overtaking .7497 will change the main trend to up. Crossing to the strong side of the angle at .7511 will put the AUD/USD in a strong position. This could lead to a test of the main retracement zone at .7544 to .7599. A downtrending angle also passes through this zone at .7587, making it a valid upside target also.

A sustained move under .7461 will indicate the presence of sellers. This could generate enough downside momentum to challenge the uptrending angle at .7411. If this fails then the selling pressure could increase, making .7386, .7369 and .7361 the next likely targets. The latter is the last potential support angle before the .7311 main bottom.

Watch the price action and read the order flow at .7461 the rest of the day. Trader reaction to this level will tell us if the buyers are increasing control, or if the sellers are retaking control.