AUD/USD Forex Technical Analysis – July 19, 2017 Forecast

The AUD/USD is trading higher on Tuesday, but the euphoric momentum that drove the Forex pair to a two year high on Tuesday seems to have died down. Nothing has changed from Tuesday other than the spike to the upside may have become enticing enough to speculators who bought the breakout hoping for a fast buck, and there is nothing wrong with that.

If you recall, the rally was fueled by an upbeat assessment of the economy from the Reserve Bank of Australia. The latest minutes from its monetary policy meeting showed policymakers were markedly optimistic about the economy. They were particularly upbeat on wages growth and the labor market.

Essentially, the AUD/USD strengthened because the central bank’s positive economic outlook led investors to narrow the odds on a hike in interest rates.

Trading is also light today ahead of Thursday’s Australian reports on Employment Change and the Unemployment Rate.

Technical Analysis

The main trend is up according to the daily swing chart. However, the Forex pair is up ten days from its last bottom which puts it in the window of time for a potentially bearish higher-high, lower-close or closing price reversal top.

The nearest upside target is a former main top at .8162 and a major 50% level at .8165.

On the downside, two former tops at .7834 and .7777 could become support.

Forecast

Based on the earlier price action, the direction of the AUD/USD today will be determined by trader reaction to the steep uptrending angle at .7971.

Crossing to the strong side of the angle at .7971 will put the Australian Dollar in an extremely bullish position against the U.S. Dollar.

A sustained move under .7971 will signal the presence of sellers. This could eventually trigger a short-term correction into at least .7834.