AUD/USD Forex Technical Analysis – July 4, 2017 Forecast

The AUD/USD is trading sharply lower on Tuesday after the Reserve Bank of Australia released its latest interest rate decision and monetary policy statement. The RBA kept interest rates unchanged as expected, but also signaled that it was unlikely to raise rates anytime soon. The central bank also said that an appreciating exchange rate would complicate the country’s economic adjustment to lower levels of mining investment.

Finally, the RBA said in its statement that, “The Australian economy is expected to strengthen gradually.”

The news was enough to send the AUD/USD lower as speculators took profits after last week’s price surge was fueled by hawkish talk from several central bankers.

Technical Analysis

The main trend is up according to the daily swing chart. However, today’s lower low has helped make .7712 a new main top.

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

Forecast

Based on the current price at .7606 and the earlier price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the uptrending angle at .7592. This angle was tested earlier in the session.

Holding .7592 indicates that buyers came in to defend the trend on the earlier weakness. This could create the upside momentum needed to challenge the downtrending angle at .7632. Overtaking this angle will indicate the buying is getting stronger.

If sellers can take out .7592 with conviction then we could see an acceleration to the downside with the main 50% level at .7542 the next likely downside target.

Watch the price action and read the order flow at .7592 the rest of the session. Volume is expected to be light so be careful selling weakness or buying strength. You don’t want to get caught in a trap.