AUD/USD Forex Technical Analysis – September 22, 2015 Forecast

The AUD/USD broke on Monday after Federal Reserve Bank of Atlanta president Dennis Lockhart, said at a speech he put the decision of the Fed last week to keep rates at near zero on “prudent risk management around recent and current market volatility”.

Mr. Lockhart said while that volatility raised risks to the U.S. economic and inflation outlook, he said, “I am confident the much-used phrase ‘later this year’ is still operative.

Commonwealth Bank of Australia chief currency strategist Richard Grade said he expected further downside pressure.

The Forex pair could see further pressure this week due to additional hawkish commentary from FOMC Member Lockhart at 6:30 p.m. ET on Tuesday, and ECB President Mario Draghi at 9:00 a.m. ET on Wednesday. Lockhart is also scheduled to speak again at 12:30 p.m. ET on Wednesday. Fed Chair Janet Yellen is scheduled to speak on Thursday at 5:00 p.m. ET.

Based on Monday’s price action, the currency markets are expected to see increased volatility the rest of the week.

Technically, the main trend is up according to the daily swing chart. However, momentum appears to have shifted to the downside. The main range is .6908 to .7279. Its retracement zone at .7093 to .7050 is the minimum downside target. This is followed today by an uptrending angle at .7028.

On Monday, the market closed at .7132. This puts it on the weak side of a downtrending angle at .7139 and an uptrending angle at .7148. These two angles are resistance today. A rally through .7148 will likely lead to a test of the downtrending angle at .7199.

The key angle to watch comes in at .7119. Trader reaction to this angle will set the tone for the day. A sustained move over this angle will indicate the presence of buyers. However, don’t expect a breakout to the upside unless .7148 is overcome with conviction.

Crossing to the weak side of the angle at .7119 will signal the presence of selling. This will likely lead to a test of the 50% level at .7093, followed by the Fib level at .7050.

Watch the price action and read the order flow at .7119 today. This will tell us whether the bulls or the bears are in control.