Australian Dollar and Coins

AUD/USD Forex Technical Analysis – May 23, 2018 Forecast

The AUD/USD is plunging on Wednesday thanks to a fresh decline in market risk appetite. Demand for the Australian Dollar is generally easing as global trade tensions picked up once again. There are renewed concerns that a U.S.-China trade war could still break out thanks to continued signs of dissatisfaction from President Trump over the progress of trade talks.

Additionally, comments from the Reserve Bank of Australia (RBA) Governor Philip Lowe did little to support the Australian Dollar, meanwhile, as he expressed concern over China’s mountain of debt.

Look for volatility with the release of the Fed minutes at 1800 GMT. A hawkish Fed is likely to drive the AUD/USD lower.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The AUD/USD, however, is rapidly approaching a key retracement zone. A failure to hold this area will shift momentum to the downside.

A trade through .7606 will signal a resumption of the uptrend. The trend will change to down on a move through .7448.

The main range is .7812 to .7412. Its retracement zone at .7612 to .7659 is the primary upside target. Aggressive counter-trend sellers could come in on a test of this area.

The first short-term range is .7448 to .7606. Its 50% level or pivot is .7527. This level is currently being tested.

The second short-term range is .7412 to .7606. Its retracement zone at .7509 to .7486 is the next downside target.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the short-term pivot at .7527.

A technical bounce off .7527 will signal the presence of buyers. However, they are going to have to generate some strong upside momentum to take challenge the minor top at .7606 and the 50% level at .7612.

A sustained move under .7527 will indicate the presence of sellers. This could trigger a further break into .7509 to .7486. Once again, since the main trend is up, we could see a technical bounce on the first test of this zone.

If .7486 fails as support, we could see a move into the .7448 main bottom.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.