AUD/USD Forex Technical Analysis – March 20, 2017 Forecast

The AUD/USD finished higher on Friday, but remained inside last Wednesday’s major range. This suggests impending volatility. The close near last week’s high indicates that investors may take a shot at breaking out to the upside early in the session.

The direction of the Aussie on Monday will be determined by how investors interpret the G20 decisions reached over the week-end. According to Reuters, “Financial leaders from the world’s biggest economies found common ground on foreign exchange at a G20 meeting on Saturday but failed to agree on trade, highlighting a global shift towards protectionism and setting a cautious tone for the financial markets next week.”

Some traders are saying that no change to G20’s stance on FX is welcome news and should keep FX volatility low. Others are saying that a failure to agree on a commitment to keep global trade free and open will have negative consequences for financial markets.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through last week’s high at .7719 will signal a resumption of the uptrend. A trade through the .7740 main top will reaffirm the uptrend, putting the market in a position to test the November 8 main top at .7777.

The AUD/USD isn’t close to turning the main trend to down, but today is the seventh day up from the .7490 main bottom so today’s session will begin with the market in the window of time for a potentially bearish closing price reversal top.

The short-term range is .7490 to .7719. If there is a sell-off then its retracement zone at .7604 to .7577 will become the primary downside target.

Forecast

Based on Friday’s close at .7702, the direction of the AUD/USD on Monday will be determined by trader reaction to the downtrending angle at .7698.

A sustained move over .7698 will indicate the presence of buyers. This could create the upside momentum needed to challenge the next downtrending angle at .7719.

Overtaking .7719 will indicate the buying is getting stronger. This could drive the market into the main top at .7740. A drive through this price will change the main trend to up. Crossing to the strong side of the steep uptrending angle at .7770 will put the AUD/USD in a bullish position.

A failure to overcome .7698 will signal the presence of sellers. The daily chart is wide open to the downside so we could see the start of a prolonged break. The nearest uptrending support angle comes in at .7630 today, followed by the 50% level at .7604.

Watch the price action and read the order flow at .7698 today. Trader reaction to this angle will set the tone for the day. Look for early volatility due to the reaction to the G20 news.