AUD/USD Forex Technical Analysis – March 13, 2017 Forecast

A weaker U.S. Dollar is helping to drive the Australian Dollar higher early Monday. The AUD/USD is rebounding after a steep sell-off last week. The catalyst is a drop in U.S. Treasury yields tied to the mixed U.S. Non-Farm Payrolls report on Friday.

On Friday, the U.S. Labor Department reported that U.S. Non-Farm Payrolls rose 235,000 last month. This came in above the consensus estimate, but disappointed some investors who were expecting a blowout payrolls number similar to last Wednesday’s extremely strong ADP private sector forecast.

The unemployment rate came out as expected at 4.7 percent, but average hourly earnings came in below the estimate with a read of 0.2% versus an estimate of 0.3%.

Last week’s sell-off was caused by investors pricing in a March rate hike by the Fed. Friday’s rally and today’s subsequent follow-through move indicates that investors may be reducing the odds of a rate hike between now and June.

Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is starting to trend higher. A trade through .7632 will turn the main trend to up. A move through .7490 will signal a resumption of the downtrend.

The short-term range is .7632 to .7490. Its 50% level or pivot comes in at .7561. The AUD/USD is currently trading over the pivot, indicating that momentum is getting stronger.

The main range is .7740 to .7490. Its 50% level or pivot at .7615 is the next upside target.

Forecast

Based on the current price at .7566 and the earlier price action, the direction of the market the rest of the session is likely to be determined by trader reaction to the 50% level at .7561.

A sustained move over .7561 will signal that the buying is increasing. This could trigger a further rally into the short-term downtrending angle at .7592. Since the trend is down, sellers may come in on a test of this angle, but if it fails then look for an acceleration into the resistance cluster at .7615 to .7620.

A sustained move under .7561 will indicate the presence of sellers. The next down move could be labored because of tight support levels at .7451 and .7530. Look for an acceleration to the downside under .7530 with the next support angle coming in at .7510. This is the last potential support angle before the .7490 main bottom.

Watch the price action and read the order flow at .7561 all session. Trader reaction to this price will tell us if the buyers are regaining control, or if sellers have returned.