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| Australian Dollar |
The AUD/USD is trading higher for the week and inside last week’s range. This chart pattern suggests investor indecision and impending volatility. The price action is being driven by increased demand for higher risk assets and rising commodity prices. However, traders are starting to think the Forex pair is overbought in the wake of a report from Westpac that called the currency “expensive”.
Weekly Technical Analysis
The main trend is down according to the weekly swing chart. However, momentum is trending higher. A trade through .8124 will change the main trend to up, but the Forex pair could run into resistance at the former main top at .8162 or the major 50% level at .8165.
On the downside, the nearest support is the Fibonacci level at .7886 and the 50% level at .7812.
Weekly Technical Forecast
Based on last week’s price action and the price action from earlier this week, the direction of the AUD/USD the rest of the week is likely to be determined by trader reaction to the downtrending Gann angle at .8024.
A sustained move over .8024 will indicate the presence of buyers. This could drive the market into a steep uptrending Gann angle at .8061. Crossing to the strong side of this angle will put the AUD/USD in an extremely bullish position. This move could create the upside momentum needed to challenge the next main top at .8124.
The inability to overcome .8024 and a sustained move under this angle will signal the presence of sellers. This could drive the AUD/USD back into the downtrending angle at .7924. Crossing to the bearish side of this angle will indicate the selling is getting stronger with the Fibonacci level at .7886 the next target.
Basically, we’re looking for a surge over .8061 and a possible break on a sustained move under .8024.
