AUDUSD Forex Forecast – Testing Channel Bottom

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160208_audusdAUDUSD has been trending higher lately, moving inside an ascending channel on its 1-hour time frame. Price is currently testing support at the .7100 major psychological level and might be due for a bounce to the top.
The 100 SMA is above the longer-term 200 SMA, confirming that the uptrend is likely to carry on. In that case, a test of the channel resistance at the .7300 handle might take place. Stochastic and RSI are both moving out of the oversold regions, indicating that buyers are taking control of price action.
However, a downside break of support might still be possible, taking AUDUSD for a reversal from its previous uptrend. In that case, a drop to the channel lows at .6800 could be seen.
Chinese markets are closed for the holiday today, which suggests that a bit of consolidation might take place. Earlier today, Australia reported a 1.0% gain in ANZ job advertisements, which is a leading indicator for employment.
There are no major reports due from the US. Last Friday, the NFP report chalked up a smaller than expected increase in hiring but the underlying data suggests that the labor market slack is being absorbed. Labor force participation improved while average hourly earnings rose higher than expected.
Market sentiment could determine where price might head next from here, although the path of least resistance might be to the downside due to strong demand for the dollar on upbeat US fundamentals.

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

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