Australia Markets open in 1 hr 1 min

AUD/USD Forex Technical Analysis – Inside Move Suggests Impending Volatility

James Hyerczyk

The AUD/USD is trading lower on Monday and inside Friday’s range. This usually indicates investor indecision and impending volatility. There are no major reports today and the U.S. is on bank holiday so volume is well-below average.


Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7733 will signal a resumption of the downtrend. The prolonged move down in terms of price and time has also put the Forex pair in the window of time for a potentially bullish closing price reversal bottom.

The main range is .7571 to .8124. Its retracement zone is .7848 to .7782. A sustained move under this zone will be a sign of weakness.

Daily AUDUSD Short-Term

Daily Forecast

Based on the earlier price action, the direction of the AUD/USD is likely to be determined by trader reaction to the Fibonacci level at .7782.

A sustained move under .7782 will signal the presence of sellers. This could drive the market into the long-term uptrending angle at .7741. This angle essentially stopped the selling on Friday.

Taking out last week’s low at .7733 could trigger an acceleration to the downside since the next major target is the long-term uptrending angle at .7656.

Overtaking the Fib level at .7782 will indicate the presence of buyers. Upside momentum could pick up on the move with the next target angle coming in at .7842.

We don’t expect any major moves today because of the low volume so buying strength over .7782 and selling weakness under .7741 could be risky.

This article was originally posted on FX Empire