Yahoo Finance AUD/USD Forex Technical Analysis – Hawkish Comments from Fed’s Harker Pressures Australian Dollar
The AUD/USD is posting a volatile session on Tuesday. Earlier in the session, the Forex pair surged as the U.S. Dollar plunged in reaction to hawkish commentary from European Central Bank President Mario Draghi. A hawkish sounding Draghi seemed to indicate the ECB is coming close to beginning the process of reducing its economic stimulus which could eventually lead to an interest rate hike.
The Aussie reached its high for the session and began selling off after hawkish commentary from Philadelphia Fed President Patrick Harker.
“I’m sticking to my outlook that we’re on the right path,” Harker told the European Economics and Financial Centre in London, according to prepared remarks. “In the case of inflation, I’ve seen the factors exerting downward pressure as temporary.”
“I still support the continued gradual removal of accommodation,” Harker said. “I still see another rate hike as appropriate for 2017.”
Next on tap at 1700 GMT is Fed Chair Janet Yellen. She is hawkish so I don’t think she is going to say anything to contradict the comments from FOMC Member Patrick Harker.
Technical Analysis
The main trend is up according to the daily swing chart. However, the intraday price action suggests the market may be preparing to shift momentum to the downside with a higher-high, lower-close chart pattern.
A trade through .7635 will signal a resumption of the uptrend. A move through .7535 will indicate the selling pressure is getting stronger.
The short-term range is .7635 to .7535. Its retracement zone at .7585 to .7597 is currently being straddled. This zone is likely to act like a pivot the rest of the session.
The main range is .7372 to .7635. If the sell-off continues then look for an eventual move into its retracement zone at .7503 to .7472.
Forecast
Based on the current price at .7586 and the earlier price action, the direction of the AUD/USD the rest of the session is going to be determined by trader reaction to the short-term 50% level at .7585.
Holding above .7585 will indicate the presence of buyers. Clawing back above a downtrending angle at .7590 and the short-term Fib at .7597 will indicate the buying is getting stronger. This could trigger a retest of the downtrending angle at .7613. This is the last potential resistance angle before the .7635 main top.
A sustained move under .7585 will signal the presence of sellers. The daily chart is wide open to the downside so we could see a steep plunge into the major uptrending angle at .7542 if Fed Chair Yellen offers hawkish commentary.
This article was originally posted on FX Empire
