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AUD/USD Forex Technical Analysis – Changing Fundamentals Make Aussie Vulnerable to Downside

James Hyerczyk

The AUD/USD is trading lower this week while posting an inside move. This indicates investor indecision and impending volatility. The Forex pair may be going through the transition from bullish to bearish also.

A shift in the fundamentals may start to put long awaited pressure on the Australian Dollar. Commodity prices are starting to decline, led by weaker gold and crude oil. The stock market also looks a little shaky. These are the markets that drove the Aussie higher so if they start to sell off then look for the AUD/USD to tumble.

The main trend is up according to the weekly swing chart, however, after hitting .8135 last week, the Forex pair appears to have run into a wall of resistance. Sellers seem to be defending a former main top at .8162 and a major 50% level at .8165. In order to maintain the strong upside momentum, the buying is going to have to be strong enough to take out these levels.

The market is in no danger of changing the trend to down or forming a closing price reversal top, but we could see a new minor top form if .7956 is taken out. In this case, .8135 will become a new minor top.

Weekly AUD/USD

Forecast

Based on this week’s price action, the direction of the AUD/USD the rest of the week will be determined by trader reaction to the steep uptrending Gann angle at .8141.

A sustained move under .8141 will signal the presence of sellers. The weekly chart is wide open to the downside. If above average selling volume comes in then we could see an acceleration to the downside with the main target a support cluster at .7821 to .7818. We’re not likely to see a test of this area this week, but it does highlight the fact that this market is vulnerable to the downside.

A sustained move over .8141 will indicate the presence of buyers. This will put the AUD/USD in a bullish position and could fuel an eventual breakout over .8165.

This article was originally posted on FX Empire

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