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AUD/USD Forex Technical Analysis – January 24, 2017 Forecast

By:
James Hyerczyk
Updated: Jan 24, 2017, 18:12 UTC

After early session strength, the AUD/USD reversed to the downside early Tuesday. The selling was likely related to the stronger U.S. Dollar, renewed

Australian Dollar

After early session strength, the AUD/USD reversed to the downside early Tuesday. The selling was likely related to the stronger U.S. Dollar, renewed interest in higher yielding assets and position-squaring ahead of Wednesday’s report on consumer inflation.

AUDUSD
Daily AUD/USD

Technical Analysis

The main trend is up according to the daily swing chart. However, today’s price action suggests a potentially bearish closing price reversal top may be forming. If formed today and confirmed on Wednesday, we could see the start of a 2 to 3 day break. A sustained move through the intraday high at .7608 will indicate the return of buyers and could create enough upside momentum to challenge the November 8 top at .7777.

The main range is .7777 to .7159. Its retracement zone is .7468 to .7541. The market is currently trading on the strong side of this zone, giving the AUD/USD a strong upside bias. The uptrend will start showing signs of weakness if the Forex pair begins to break back into the zone. The bias will shift to down if .7468 fails as support.

The new short-term range is .7159 to .7608. If the selling prevails and the market starts to break then its retracement zone at .7383 to .7330 will become the primary downside target.

Forecast

Based on the current price at .7569, the direction of the AUD/USD today is likely to be determined by trader reaction to the uptrending angle at .7559.

A sustained move over .7559 will indicate the presence of buyers. This could create enough upside momentum to retrace the move back to today’s intraday high at .7608. This is followed by a long-term downtrending angle at .7645. This is the last potential resistance angle before the .7777 main top.

A sustained move under .7559 will signal the presence of sellers. The first target is the main Fib at .7541, followed by another downtrending angle at .7512.

The daily chart opens up to the downside under .7512 with the next target the main 50% level at .7468. This is the trigger point for an even steeper break.

The price action suggests that traders are lightening up ahead of tomorrow’s CPI data. Later today, investors will get the chance to react to reports on U.S. manufacturing PMI and existing home sales. Furthermore, investors should be prepared for volatility and a possible two-sided trade because of Trump’s unpredictability.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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