AUD/USD Forex Technical Analysis – Breakout Over .6570 Targets March Top at .6685

The Australian Dollar is trading higher on Friday and in a position to challenge its recent short-term top at .6570. The catalysts behind the move are increased demand for risky assets, optimism the economy will start to recover as the government eases restrictions and the release of the Reserve Bank of Australia (RBA) monetary policy statement.

At 02:57 GMT, the AUD/USD is trading .6542, up 0.0047 or +0.73%.

Australia’s central bank said on Friday it expects the country’s economy to contract by 6% this year and unemployment to peak at 10% as businesses shut and layoff staff to curb the spread of the novel coronavirus. Additionally, the economy is on course for its worst recession ever, and its first in 30 years.

In Friday’s quarterly statement on monetary policy, the RBA repeated the board was committed to do what it can to support jobs, incomes and businesses as the government finalizes plans to fully restart the economy by July.

With fewer than 20 new infections reported each day, Australia’s Prime Minister Scott Morrison on Friday began talks with state and territory leaders to decide which restrictions will be eased and when, Reuters reported.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the last main top at .6570 will signal a resumption of the uptrend. The main trend will change to down on a trade through the last swing bottom at .6373.

The minor trend is up. This move shifted momentum to the upside.

The minor range is .6570 to .6373. Its 50% level or pivot at .6471 is support.

The short-term range is .6254 to .6570. Its 50% level at .6412 is additional support.

The main range is .6685 to .5510. Its retracement zone at .6236 to .6097 is the major support area. This zone is controlling the longer-term direction of the AUD/USD.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6471, the direction of the AUD/USD the rest of the session on Friday is likely to be determined by trader reaction to the first pivot at .6471.

Bullish Scenario

A sustained move over .6471 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for the buying to possibly extend into the main top at .6570. This is a potential trigger point for an acceleration to the upside with the next potential target the March 9 main top at .6685.

Bearish Scenario

A sustained move under .6471 will signal the presence of sellers. The first target is the short-term 50% level at .6412, followed by the main bottom at .6373.

The main bottom at .6373 is a potential trigger point for an acceleration to the downside with the next target a main bottom at .6254, followed by the major Fibonacci level at .6236.