AUDUSD Forex Forecast – Bulls Waiting for a Correction

AUDUSD Forex Forecast - Bulls Waiting for a CorrectionAUDUSD has been trending higher, moving inside an ascending channel on its 4-hour chart. Price just bounced off the channel resistance around the .7750 minor psychological mark and could be due for a test of support near .7550.
Using the Fib tool on the latest swing high and low shows that the 61.8% Fibonacci retracement level lines up with the .7550 minor psychological mark and channel support, which could make it a strong floor. This is also near the area of interest at the .7600 level, which previously held as resistance.
The 100 SMA is above the 200 SMA so the uptrend is likely to carry on, with the moving averages lining up with the Fibs and adding to their strength as potential support. Meanwhile, stochastic is already on the move up, suggesting that buyers are already taking control of price action.
The RBA is set to release the minutes of its August monetary policy meeting in today’s Asian session, shedding more light on why they decided to lower interest rates by 0.25% this month. In addition, market watchers are on the lookout for clues about future easing moves, which could stem from a weaker inflation and growth outlook.
Other catalysts from Australia include the release of the July employment report on Thursday. Analysts are expecting to see an increase of 10.2K in hiring, higher than the previous 7.9K gain and enough to keep the unemployment rate unchanged at 5.8%. Stronger than expected data could allow the Aussie to regain ground.
As for the dollar, the FOMC minutes could be a strong catalyst for price action since traders are looking for more clues on whether the Fed can hike rates again before the end of the year, probably in their September or December meetings. Cautious rhetoric could spur weaker expectations of tightening, which might be bearish for the Greenback.
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.