AUD/USD Forex Technical Analysis – November 15, 2016 Forecast

The AUD/USD is trading lower early in the session. On Monday, traders posted a potentially bullish closing price reversal bottom. The move was likely fueled by position-squaring and short-covering ahead of the release of today’s Reserve Bank of Australia monetary policy minutes. Because of the rising U.S. Treasury yields, I have doubts of any rally lasting unless rates top going up or turn lower.

The RBA said in its meeting minutes that we’ve probably seen the last of the rate cuts for this investment cycle. It also added that it expects inflation to rise gradually.

Technical Analysis

The main trend is down according to the daily swing chart. However, Monday’s closing price reversal bottom signaled a possible shift in momentum to the upside. We did have a follow-through rally that confirmed the chart pattern after the minutes were released. It will remain intact as long as .7523 holds as support. This could trigger the start of a 2 to 3 day rally equal to at least 50% of the last sell-off. A trade through .7523 will negate the chart pattern and signal a continuation of the downtrend.

The main range is .7441 to .7777. Its retracement zone at .7609 to .7569 is currently controlling the longer-term direction of the market. Earlier today, the AUD/USD found resistance at the lower or Fibonacci level at .7569.

The new short-term range is .7777 to .7523. If a short-covering rally could trigger enough upside momentum then its retracement zone at .7650 to .7680 will become the primary upside target.

Forecast

Based on the current price at .7547 and the earlier price action, the direction of the AUD/USD the rest of the session will be determined by trader reaction to the long-term uptrending angle at .7554.

A sustained move under .7554 will indicate the presence of sellers. This could drive the Forex pair into .7523, followed by a main bottom at .7506 and another long-term uptrending angle at .7497. This is the last potential support angle before the .7441 main bottom.

A sustained move over .7554 will signal the presence of buyers. This could create enough upside momentum to challenge the Fib level at .7569, followed closely by the steep downtrending angle at .7577.

The angle at .7577 is the trigger point for a possible acceleration into the main 50% level at .7609. This is followed by the short-term 50% level at .7650. This is the first objective of the closing price reversal bottom chart pattern.

Essentially, look for a bullish tone to develop on a sustained move over .7577 and a bearish tone on a sustained move under .7554.