AUD/USD Forex Technical Analysis – May 9, 2018 Forecast

The AUD/USD is under pressure again early Wednesday. Today’s selling is being fueled by overall weakness in commodity-linked currencies related to President Trump’s decision to leave the Iran nuclear deal. A favorable interest rate differential because of rising U.S. Treasury yields is also making the U.S. Dollar a more attractive asset.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The Forex pair is in no position to change the trend to up, but due to the prolonged move down in terms of price and time, the AUD/USD begins today’s session in the window of time for a potentially bullish closing price reversal bottom.

This chart pattern is also not likely to lead to a change in trend, but it will indicate the buying is greater than the selling at current price levels. This could lead to a 2-3 day counter-trend rally.

The minor trend is also down. It was reaffirmed on Tuesday when sellers took out the previous minor bottom at .7472. A trade through .7560 will change the minor trend to up. This will also shift momentum to the upside.

Minor resistance is the former bottom from December 8 at .7501.

The nearest potential downside target is the June 2, 2017 main bottom at .7372. This is followed by the May 9, 2017 main bottom at .7329. We could see a technical bounce on the first test of these levels.

The bottom at .7329 is also a potential trigger point for an acceleration into the December 23, 2016 main bottom at .7159.

Daily Swing Chart Technical Forecast

The trend is your friend so we expect to see further downside pressure especially if the fundamental narrative remains the same, i.e. expectations for higher U.S. interest rates.

Traders will be watching today’s U.S. Producer Inflation report, due to be released at 1230 GMT. It is expected to come in at 0.2%. The AUD/USD could plunge if the number is bigger-than-expected. Consequently, we could see a strong short-covering rally and possibly a reversal to the upside if the number misses to the low side.