AUD/USD Forex Technical Analysis – December 8, 2016 Forecast

The AUD/USD is trading higher early Thursday, greater demand for higher risk assets and a weaker U.S. Dollar are behind the buying. Speculators may be betting on more stimulus from the European Central Bank later in the session.

A 3.5% surge in iron ore prices is helping to underpin the Australian Dollar. Traders seem to be ignoring the unexpected increase in the Trade Balance deficit. A breakout rally by the New Zealand Dollar may be causing some spillover buying. The Kiwi is being helped by bullish comments from RBNZ Governor Graeme Wheeler who said interest rates are probably low enough to return inflation to his 2-percent target amid a robust economic expansion.

Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up early in the session when the AUD/USD crossed the swing top at .7497. There was very little follow-through on the move with the rally ending at .7507.

The main range is .7777 to .7311. Its retracement zone at .7544 to .7599 is the primary upside target. A downtrending angle passes through this zone at .7557, making it a valid upside target also. Look for a technical bounce on the initial test of this area.

Forecast

Based on the current price at .7500 and the earlier price action, today’s rally is likely to remain intact as long as the market holds above the short-term uptrending angle at .7489.

A sustained rally over .7489 will signal the presence of buyers. This could create enough upside momentum to overcome the intraday high at .7507. The rally could extend further over this price with the next targets .7544 and .7557.

If .7489 fails as support then look for a break into .7461. This is followed by a pair of uptrending angles at .7441 and .7429.

Look for a bullish tone today as long as .7489 holds as support. Look for increased buying over .7507 with .7544 the best upside target.