AUD/USD Forex Technical Analysis – July 14, 2014 Forecast » Fx …
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Selling pressure could hit the AUD/USD when the Forex pair begins trading on Monday. Over the week-end, Reserve Bank of Australia Governor Glenn Stevens reiterated his belief of an overvalued Australian dollar when he said that investors may be underestimating the risk of a “material decline”.
In an interview with The Weekend Australian newspaper, Mr. Stevens was quoted as saying, “It continues to be my view that on most standard metrics that you could devise, it’s hard to see how most of those metrics would have the Aussie dollar quite this high.”
Stevens added, “And that’s why we’ve said that our sense is that some of the investors are maybe underestimating the probability of a material decline at some point, but I can’t say when that might be.”
Additionally, Stevens said a rise in U.S. interest rates or a sudden flight from risk could also trigger a sell-off in the Aussie. Talk of an RBA rate cut could also lead to speculative selling pressure.
Daily AUD/USD
Technically, the main trend is down on the daily chart. During the week-ending July 4, the trend changed to down and a closing price reversal top was formed on the weekly chart. Last week, the Aussie tested and was rejected at a retracement zone, setting up a potentially bearish secondary lower-top.
This week, look for traders to go after the low at .9328. Taking out this level will confirm the weekly closing price reversal top and reaffirm the daily downtrend.
The first downside target today is an uptrending angle at .9374. Heavy selling pressure should take out this level easily, leading to a test of the retracement zone at .9366 to .9334.
Taking out .9334 should lead to a test of the recent low at .9328. The market should open up to the downside once this level is taken out with the first target an uptrending angle at .9302, followed by another at .9265. This angle is the last potential support before the June 3 bottom at .9229.
On the upside, look for resistance at the resistance cluster formed by a downtrending angle and 50% level at .9414 to .9416. Additional resistance is the Fibonacci level at .9437.
The tone of the market should be determined by how investors react to .9366. This is the key pivot price that should control the short-term direction of the market.
Assuming investors have read the papers over the week-end and believe Mr. Stevens, look for selling pressure to start early in the session.
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AUD/USD Forex Technical Analysis – July 14, 2014 Forecast » Fx …
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