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

The Australian Dollar is trading slightly higher against the U.S. Dollar early Monday. The market is catching a bid in reaction to the weaker U.S. Dollar. The Greenback is being pressured by investor reaction to President Trump’s criticism of Fed policy and his discomfort with the strength in the U.S. Dollar.

At 0544 GMT, the AUD/USD is trading .7421, up 0.0003 or +0.04%.

The Aussie is trading in a tight range because investors are being forced to evaluate the impact of Trump’s comments against the divergence in monetary policy between the hawkish U.S. Federal Reserve and the dovish Reserve Bank of Australia which is making the U.S. Dollar a more favorable investment.

Additionally, traders are reluctant to position themselves too aggressively ahead this week’s quarterly consumer inflation data from Australia and rising U.S. Treasury yields.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend will change to up on a trade through .7443. A move through .7318 will signal a resumption of the downtrend.

The short-term range is .7310 to .7484. Its 50% level or pivot is .7397. The AUD/USD is currently trading on the strong side of this level, helping to give it an early upside bias. Traders should treat this level as counter-trend support on the first test today. If it fails to hold on the first test then prices could weaken.

The main range is .7677 to .7310. If the trend changes to up then its retracement zone at .7494 to .7537 will become the primary upside target.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD is likely to be determined by trader reaction to the short-term downtrending Gann angle at .7434.

Bearish Scenario

A sustained move under .7434 will indicate the presence of sellers. If this creates enough downside momentum then look for a break into the pivot at .7397.

A failure to hold .7397 could attract further selling pressure with a downtrending Gann angle at .7384 the next target. Prices will continue to roll lower if this Gann angle fails with the next target angle coming in at .7347. This is the last potential support angles before the .7318 main bottom.

Bullish Scenario

A sustained move over .7434 will signal the presence of buyers. This could create the upside momentum needed to change the main trend to up. The next target angle drops in at .7459. This is the last potential resistance angle before the .7484 main top and the 50% level at .7494.