AUD/USD Forex Technical Analysis – October 19, 2015 Forecast

The AUD/USD finished lower on Friday as well as for the week. The week started out promising with the market reaching its highest level since August 18. Sellers, however, came in at .7381 after China posted some bad trade balance numbers. This triggered a sharp break into .7197. The Forex pair traded sideways the rest of the week.

The price action suggests that upside momentum may be waning. This could lead to the start of a correction of the recent rally from September 29 to October 12. Traders are likely bracing for a volatile session today because of the early release of GDP data from China. The report is expected to show the economy slowed slightly from 7.0% to 6.8%.

Technically, the main trend is up according to the daily swing chart. Momentum, however, appears to be shifting to the downside.

The short-term range is .7381 to .7197. Its 50% level or pivot is at .7289. Trader reaction to this level is likely to set the tone for the day.

A sustained move under .7289 will signal the presence of sellers. Additional resistance is a downtrending angle at .7281.

The daily chart indicates there is room to the downside with the first target a longer-term uptrending angle at .7216. This is followed by a minor bottom at .7197.

The main range is .6936 to .7381. Its retracement zone at .7158 to .7106 is the primary downside target this week.

A sustained move over the short-term pivot at .7289 will signal the presence of buyers. Any rally is likely to be labored because of a series of downtrending angles at .7331, .7356 and .7369. The latter is the last potential resistance angle before the .7381 main top and major 50% level.

Taking out .7381 with conviction could trigger an acceleration to the upside with the next major targets a major Fibonacci level at .7492. This is followed closely by a steep uptrending angle at .7496.

Watch the price action and read the order flow at .7289 today. This will tell us whether the bulls or the bears are in control. Look for volatility after the release of China’s GDP report.