Forex Technical Update

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AUD/USD 1H Chart 7:30AM PM EDT 7/13/2012

The AUD/USD has been a volatile pair this week. The main development was a sharp break below June’s rising trendline. However, it has found support at 1.0098 after the break, and a pullback during the 7/12, and so far the Friday, 7/13 session as well, brings the pair back to 1.0180 area ahead of the Friday, US session.

Here, we start to enter into a zone of key factors to consider.

1) 50-61.8% retracement of the 1.0279-1.0098 swing is between 1.0189 and 1.0210.
2) July’s support trendeline that was broken is tested as resistance around 1.0185.
3) If the current near-term rally extends higher it will come up against a declining trendline connecting  7/11 and 7/12 highs at about 1.02.
4) The 1H RSI reading is at 60, and if the market is to confirm bearish momentum, it should fall back below 40.

These factors can be a challenge for the 7/12-13 risk-on rally. A risk-0ff day should attempt to test the 1.01 low.

The next event risk during the 7/13 may be the University of Michigan consumer sentiment survey. It is expected to post a 73.5 reading for July, slightly better than the 73.2 for June. A failure to improve can weigh on risk sentiment, making it even more difficult for the market to push through the crossroads.

Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.