AUD/USD Forex Technical Analysis – Bouncing Between Weekly 50% Levels at .7947 and .7818

The Australian Dollar closed lower last week but remained inside the previous week’s range, indicating investor indecision and impending volatility. The Fed minutes provided the fire power for the weakness when they indicated that policymakers are ready to raise interest rates a few times later this year.

The AUD/USD settled at .7836, down 0.0071 or -0.90%.

This week’s price action is expected to be largely impacted by U.S. reports on Core Durable Goods, Preliminary GDP and ISM Manufacturing PMI. Tuesday and Thursday’s Congressional testimony by new Fed Chair Jerome Powell is also expected to be a market moving event.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum has been trending lower since the formation of the main top at .8135, the week-ending January 26. A trade through .7758 will indicate the selling pressure is getting stronger.

The main range is .7501 to .8135. Its retracement zone at .7818 to .7743 is currently providing support. It stopped the price slide the week-ending February 9 at .7758.

The short-term range is .8135 to .7758. Its retracement zone at .7947 to .7991 is the primary upside target. Sellers have been coming in on a test of this zone because they want to form a potentially bearish secondary lower top.

Weekly Technical Forecast

Based on last week’s price action and close at .7836, the direction of the AUD/USD this week is likely to be determined by trader reaction to the main 50% level at .7818.

Holding above .7818 will indicate the presence of buyers. If this generates enough upside momentum then look for the rally to extend into a cluster of levels including a downtrending Gann angle at .7935, the short-term 50% level at .7947, an uptrending Gann angle at .7981 and the short-term Fibonacci level at .7991.

A sustained move under .7818 will signal the presence of sellers. This could drive the AUD/USD into a cluster of potential support levels including the major Fibonacci level at .7743, an uptrending Gann angle at .7741 and a downtrending Gann angle at .7735.

Crossing to the weak side of the steep downtrending Gann angle at .7735 will put the AUD/USD in an extremely weak position. This could trigger an acceleration into an uptrending Gann angle at .7621. This is the last potential support angle before the .7501 main bottom.