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AUD/USD Forex Technical Analysis – Specs Betting RBA Will be Influenced by Hawkish Central Banks

By:
James Hyerczyk
Updated: Jun 29, 2017, 03:31 UTC

The AUD/USD rebounded on Wednesday after a sharp reversal the previous session. I suspect that speculators are now betting that the Reserve Bank of

Australian Dollar

The AUD/USD rebounded on Wednesday after a sharp reversal the previous session. I suspect that speculators are now betting that the Reserve Bank of Australia will be pressured into raising interest rates sooner than expected now that it appears the rest of the major central banks are gearing up to hike their benchmark rates.

We already know the U.S. is raising rates, and we suspect the European Central Bank is considering a rate hike, although behind closed. In the U.K., Bank of England Governor Mark Carney surprised investors by conceding a rate hike was likely to be needed as the economy came closer to running at full capacity. A couple of officials from the Bank of Canada even suggested they might tighten as early as July.

AUDUSD
Daily AUD/USD

Technical Analysis

We’re going to be looking at the weekly chart today because it gives a clearer picture of where the AUD/USD could be going over the near term based on the current upside momentum.

The main trend is down on the weekly chart, but momentum is trending higher. If the buying spree continues then look for the rally to extend into the next main top at .7749. This is a potential trigger point for an extension into major tops at .7777 and .7834.

The short-term range is .7749 to .7329. Its retracement zone is .7539 to .7589. The AUD/USD is currently trading above the retracement zone, helping to contribute to its strong upside bias.

Forecast

Look for the bullish tone to continue into the rest of the week as long as the AUD/USD holds above the Fibonacci level at .7589. We could see a technical bounce on the first test of the support cluster at .7609, but the Forex pair will weaken under .7589. This could trigger a break into the 50% level at .7539.

If the upside momentum continues then according to the weekly chart, look for the rally to extend into the next downtrending angle at .7679. This is followed by another downtrending angle at .7714. This is the last potential resistance angle before the .7749 main top.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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