AUD/USD Technical Analysis – March 3, 2014 Forecast » Fx Empire …
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The AUD/USD finished February higher, but the week and day lower as investors braced for what should be an active trading week.
Shortly after Forex markets closed on Friday, China announced that factory activity slowed to an 8-month low in February. The government survey confirmed signs of a modest slowdown in the economy because of a drop in demand. The official Purchasing Managers’ Index declined slightly to 50.2 in February from January’s 50.5. Traders were looking for a reading of 50.1.
At 8:00 a.m. ET, China will release Non-Manufacturing PMI data, followed shortly by HSBC Final Manufacturing PMI data at 8:45 p.m. ET. These reports could have an impact on the Aussie since Australia and China are trading partners.
Daily AUD/USD
Technically, the main trend is up on the daily chart, but the AUD/USD is rapidly heading toward a major retracement zone at .8869 to .8820. Standing in the way of a direct shot into this zone are a pair of uptrending angles at .8919 and .8903. Since the main trend is up, traders should watch for a possible technical bounce, following a test of this zone.
The Forex pair starts the week in a position to crossover to the weak side of a downtrending angle from the .9080 top, moving down .002 per day. This angle is at .8900. Taking out this angle will mean a failure of last Thursday’s minor bottom at .8903.
On the upside, the first resistance traders are likely to encounter is an angle from the .9080 top at .8990. This angle forms a potential resistance cluster with a 50% level at .8991. Look for sellers to show up on the first test of this area. Taking it out could trigger a rally into the Fibonacci level at .9012.
The tone of the market will be determined by two key areas. Taking out .8991 will give the Forex pair a bullish spin while a drive through .8903 will likely attract heavy selling pressure. The news from China and Australia will be the catalyst behind the moves, however, if Russia’s military action in Ukraine leads to a flight to safety then the Aussie can lose ground because it is a higher-risk asset. Order flow will also determine if traders are willing to sell weakness or buy strength.
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AUD/USD Technical Analysis – March 3, 2014 Forecast » Fx Empire …
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