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AUD/USD Forex Technical Analysis – October 29, 2015 Forecast

By:
James Hyerczyk
Updated: Oct 29, 2015, 14:30 GMT+00:00

The AUD/USD plunged on Wednesday after the U.S. Federal Reserve left open the possibility of a rate hike in December. The Fed left its benchmark interest

Daily AUD/USD

The AUD/USD plunged on Wednesday after the U.S. Federal Reserve left open the possibility of a rate hike in December.

The Fed left its benchmark interest rate unchanged as expected, but it also surprised investors by making a direct reference to its next meeting in its statement.

“In determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2 percent inflation,” it said.

The Fed also dropped a warning on global economic slowdown, a step which some believe, brings the central bank closer to a rate hike. The hawkish Fed statement raised the probability of a rate hike in December to 50 percent, up from 30 percent before the statement, according to the Fed Funds futures contract.

Today, investors will get the opportunity to react to the latest U.S. GDP report. It is expected to show that the economy grew during the third quarter 1.6%, this is down from the previous 3.9%.

Technically, the main trend is still up according to the daily swing chart, but momentum has clearly shifted to the downside. Aussie investors now have to worry about a possible rate hike by the Fed and a possible rate cut by the RBA in December. This could lead to the selling pressure over the near-term.

Daily AUD/USD
Daily AUD/USD

The main range is .6936 to .7381. Its retracement zone is .7158 to .7106. Trader reaction to this zone will determine the strength or weakness of the Forex pair. A sustained move under .7106 will indicate the presence of sellers. A sustained move over .7158 will signal the presence of buyers.

Based on the close at .7109, the nearest resistance angle comes in at .7121. Holding below this angle will also signal the presence of sellers.

The trigger point for a downside breakout is .7106. The next target angle under this price comes in at .7046. The next angle comes in at .6991. This is the last major angle before the .6936 main bottom.

Overtaking the uptrending angle at .7156 and the 50% level at .7158 could trigger a surge to the upside with the next potential target a downtrending angle at .7251.

Watch the price action and read the order flow at .7106. Trader reaction to this Fibonacci level will tell us whether the bulls or the bears are in control today. 

About the Author

James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.

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