AUDUSD Weekly Forex Forecast – 19th to 23rd Sept 2016

The weekly close below the big psychological figure 0.7500 reinforces the bearish case for the AUD/USD. The Aussie has started to make lower lows and lower highs which is the definition of a bearish trend and also trading below the 200 EMA makes the big picture looking very clear. The first level of support comes at 0.7420 but we should expect a break below it and the sell-off to extend until the end of the year all the way down to 0.7146 major swing low. On the upside, we have 0.7520 a minor resistance level that can be retested before the resumption of the bearish trend.

The Stochastic indicator is also coming off of the 80 level signaling an overbought condition and more downside.

The RBA Monetary Policy Meeting Minutes is due to be released on Tuesday which is going to provide more insights into the Australian economic outlook and the AUD/USD exchange rate. This is a high event risk that can be the catalyst for more volatility. However, the major risk event of the week remains the Fed rate decision which has become the catalyst for extreme FX market reaction. The Fed Funds Rate shows only a 9% probability of a rate hike in September; however, the key remains in the Fed statement which can hint towards a December rate hike thus it can be bullish for the US Dollar.

AUDUSD Weekly Forex Forecast – 19th to 23rd Sept 2016 – BEARISH

With Stochastic pointing south, we feel that AUDUSD would likely have some momentum moving down this coming week. The key support of 0.7420 will be tested and if it holds, then we will see a bounce. But if it does not, then AUDUSD might just be making new lows this coming week. Let’s see what happens…