AUD/USD Forex Technical Analysis – February 27, 2017 Forecast

The AUD/USD closed lower on Friday with perhaps enough downside momentum to lead to a lower opening on Monday. The catalyst behind the weakness was comments from Reserve Bank Governor Philip Lowe, who appeared to talk the Aussie lower late last week with warnings about household debt.

At the same time, the U.S. Dollar was facing pressure after traders interpreted last week’s Fed minutes as less-hawkish than expected, casting doubts on the timing of the next Fed rate hike. Additionally, traders are now pricing in the possibility that it may take several months for Congress to pass President Trump’s tax reform plan.

Technical Analysis

The main trend is up according to the daily swing chart, but the downside momentum suggests investors may go after the last main bottom at .7649. A trade through this level will change the main trend to down.

A move through .7740 will signal a resumption of the uptrend with the next target the November 8 main top at .7777.

The main range is .7511 to .7740. Its retracement zone at .7621 to .7595 is the primary downside target. We could see a technical bounce on the first test of this zone. An uptrending angle passes through this zone at .7616, making it a valid downside target also.

Forecast

Based on Friday’s close at .7668, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7660.

A sustained move over .7660 will indicate the presence of buyers. This could create enough upside momentum to challenge three short-term angles at .7700, .7720 and .7730. The latter is the last potential resistance angle before the .7740 main top.

A sustained move under .7660 will signal the presence of sellers. The first target is the main bottom at .7649.

Taking out .7649 will change the main trend to down. This could create enough downside momentum to accelerate into the 50% level at .7621, followed by the uptrending angle at .7616.

If .7616 fails as support then the next target will be the support cluster at .7589 to .7595.