AUDUSD Forex Forecast – Pullback to Channel Support?

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AUDUSD Forex Forecast - Pullback to Channel Support?
AUDUSD Forex Forecast - Pullback to Channel Support?AUDUSD has been trending higher and moving inside an ascending channel on its 4-hour time frame. However, price is currently testing the resistance around the .7900 major psychological level and might be due for a test of support at .7700.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. However, RSI is on the move down so sellers might be in control at the moment. Stochastic is already in the oversold area so selling pressure might fade soon.
If so, price could find support at the mid-channel area of interest at the .7800 major psychological level just above the 100 SMA. Stronger bullish momentum could trigger an upside break of the channel resistance and spur a sharper rally for AUDUSD.
Data from Australia was slightly weaker than expected yesterday, as the quarterly NAB business confidence index fell from 5 to 4. As for the US, data came in mixed, with the Philly Fed index printing a disappointing -1.6 figure versus the projected 8.1 reading and the initial jobless claims posting a smaller than expected increase.
There are no major reports up for release from the US or Australia today, which suggests that market sentiment could stay in play. Risk appetite has weakened yesterday when commodity prices retreated and US earnings turned out mixed.
Next week the FOMC has its interest rate statement lined up and traders might be positioning for a downbeat announcement since data from the US has been mostly weaker than expected.

 

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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