AUD/USD Forex Technical Analysis – July 11, 2017 Forecast

An easing of global interest rates and solid domestic data is helping to underpin the AUD/USD early Tuesday. Volume is light as the market retraces nearly half of the break from June 30 to July 5.

The U.S. economic event calendar is light again on Tuesday, allowing shorts to continue to square positions ahead of Fed Chair Janet Yellen’s two day testimony before Congress on Wednesday and Thursday.

FOMC Member Lael Brainard is also scheduled to speak at 1630 GMT. She is a noted Fed dove so she may try to talk down the possibility of a Fed rate hike later in the year. This could underpin the Aussie Dollar.

Technical

The main trend is up according to the daily swing chart. A trade through .7712 will signal a resumption of the uptrend. A move through .7571 will signal that momentum is trending down, but it will not change the main trend.

The main range is .7372 to .7712. Its retracement zone at .7542 to .7502 is the primary downside target.

The short-term range is .7712 to .7571. Its retracement zone is .7642 to .7658. This zone is very critical to the chart pattern. Aggressive counter-trend sellers may try to stop the rally on a trade into this zone. They are going to try to form a potentially bearish secondary lower top.

Bullish trend traders are going to try to take out this zone in an effort to make .7571 a new higher main bottom.

Forecast

Based on the current price at .7617, the first upside target is a resistance cluster at .7642. This cluster is formed by a pair of Gann angles and the short-term 50% level. Trader reaction to this area will set the tone for the day.

If buyers can’t overcome .7642 then look for the selling to resume. This could drag the market back towards last week’s low at .7571.

If buyers can overcome .7641 then look for a surge into .7658. This is another trigger point for an acceleration into a downtrending angle at .7677.

Watch the price action and read the order flow on a test of .7642. Trader reaction to this area will set the tone for the rest of the session.