AUD/USD Forex Technical Analysis – July 14, 2017 Forecast

The AUD/USD surging on Friday shortly before the U.S. opening and the release of the June U.S. Consumer Inflation and Retail Sales reports. The CPI report is expected to be a market moving event given the concerns expressed by Fed Chair Janet Yellen earlier in the week.

A stronger-than-expected CPI number should give the Fed the firepower it needs to raise interest rates at least once more in 2017. This news would drive up U.S. Treasury yields and make the U.S. Dollar a more attractive investment. The reports are due to be released at 1230 GMT.

The CPI for June is expected to come in at 0.1%, slightly above the -0.1% previous read. Core CPI is forecast at 0.2%, up slightly from 0.1%. A better-than-expected number should be bearish for the EUR/USD.

Core Retail Sales for June are expected to show a 0.2% increase, up from the May read at -0.3%. Retail Sales are expected to show a 0.1% gain, better than the previous -0.3. A better-than-expected number will underpin the U.S. Dollar, but shouldn’t have the same impact as the CPI report.

Increased demand for higher-yielding assets and a rise in commodity prices are also supporting the Australian Dollar.

Technical Analysis

The main trend is up according to the daily swing chart. The next target is the November 8, 2016 main top at .7777. Taking out this level with conviction could trigger an acceleration into the April 21, 2016 main top at .7834.

The AUD/USD begins the session in the window of time for a closing price reversal top. We’ve already had the higher-high all we need is bearish news to drive the Forex pair lower at the close.

Forecast

Based on the current price at .7758 and the earlier price action, the key support angle that has been guiding the market higher since July 5 is at .7711 today. Taking out this angle with conviction will indicate a shift in momentum. This could lead to an acceleration to the downside with the next target angle coming in at .7641. This is followed by another uptrending angle at .7606. This is the last potential support angle before the .7571 main bottom.

The upside targets are .7777 and .7834.

I’m going to say that trader reaction to .7728 will determine the direction of the market today because the AUD/USD has to close higher to sustain the rally. If it closes lower, a potentially bearish closing price reversal top will form. This could trigger the start of a 2 to 3 day correction.