AUD/USD Forex Technical Analysis – December 30, 2016 Forecast

The AUD/USD rose to its highest level in a week before pulling back and becoming rangebound. The move was more about the U.S. Dollar’s weakness rather than the Aussie strength. The Australian Dollar trended higher all week as investors used the quiet holiday sessions to book profits after a steady decline since early November. Weakness in U.S. Treasury yields this week also reduced demand for higher risk assets.

Technical Analysis

The main trend is down according to the daily swing. Momentum can best be described as sideways to higher.

A trade through .7279 will turn the minor trend to up. A move through .7159 will signal a resumption of the downtrend. This could lead to an eventual test of the May 24 bottom at .7145 and the February 29 main bottom at .7107.

Forecast

Based on Thursday’s close and the earlier price action, the direction of the AUD/USD today is likely to be determined by trader reaction to the long-term uptrending angle at .7243.

Overtaking .7243 will signal the presence of buyers. This could generate the upside momentum needed to challenge the December 21 high at .7279, followed closely by the downtrending angle at .7304.

The inability to overcome the angle at .7243 will signal the presence of sellers. The low volume could lead to a lower drifting trade, but if there is an acceleration to the downside accompanied by rising volume, we could see a move into last week’s low at .7159 then the pair of main bottoms at .7145 and .7107.

Watch the price action and read the order flow at .7243 today. Trader reaction to this long-term angle will tell us if the buying is getting stronger, or if the sellers are recapturing control.