AUD/USD Forex Technical Analysis – November 13, 2015 Forecast

The AUD/USD finished higher on Thursday, bolstered by stronger-than-expected Australian labor market data. The news reduced the chances of the Reserve Bank of Australia cutting interest rates any time soon.

According to the Australian Bureau of Statistics, Australia’s unemployment rate fell to 5.9 percent in October, from 6.2 percent. The headline number showed the economy added 58,600 jobs, soundly beating the estimate of 14,800.

After the news was released, investors reduced the odds of a December rate cut from 15 percent to 5 percent. Pricing for a rate cut at the RBA’s February meeting fell to 26 percent and a rate cut at any time during 2016 dropped from 100 percent to 66 percent.

Later today, all eyes will be on the U.S. retail sales report because it will tell the Fed if consumers are helping to strengthen the economy. Month-to-month core retail sales are expected to be up 0.4%. Month-to-month retail sales are expected to show a rise of 0.3%.

Month-to-month PPI is expected to rise 0.2%. Core PPI is expected to be up 0.1%. Preliminary University of Michigan Consumer Sentiment is estimated at 91.3.

Stronger-than-expected retail sales should solidify a rate hike by the Fed in December. This should put pressure on the AUD/USD.

Technically, the main trend is down according to the daily swing chart. The short-term range is .7223 to .7015. Its retracement zone at .7119 to .7143 essentially stopped the rally on Thursday when the market reached a high at .7153 before breaking back to .7124. Also providing resistance was a long-term downtrending angle. This angle comes in at .7141 today.

Based on Thursday’s close at .7124, the key level to watch today is the 50% level at .7119.

Holding the 50% level at .7119 will indicate the presence of buyers. The main upside targets to overcome are an uptrending angle at .7135, a long-term downtrending angle at .7141 and a short-term downtrending angle at .7153.

Since the main trend is down, sellers may come in to defend the trend between .7135 and .7153. Taking out the angle at .7153 could trigger an acceleration into another downtrending angle at .7188. A trade through .7169 will erase the entire break triggered by last Friday’s stronger-than-expected U.S. Non-Farm Payrolls report.

A sustained move through .7119 will signal the presence of sellers. This could trigger an acceleration to the downside with the next target an uptrending angle at .7075.

Watch the price action and read the order flow at .7119. Trader reaction to this level will tell us whether the bulls or the bears are in control. Look for increased volume and volatility with the release of the U.S. retail sales report at 8:30 a.m. ET.