AUD/USD Forex Technical Analysis – Closing Price Reversal Bottom Confirmed with .7706 Next Potential Target

The Australian Dollar is rebounding on Friday after hitting its lowest level since December 28 the previous session. Nonetheless, the currency is still in a position to post a steep loss for the week. The selling is being driven by a drop in 10-year Australian bond yields.

At 05:39 GMT, the AUD/USD is trading .7620, up 0.0038 or +0.51%.

Australian 10-year yields are down 13 basis points on the week at 1.677%, a long way from the February top of 1.97%. A break under 1.65% could allow a further rally toward 1.42% and fill a chart gap left during February’s sudden selloff.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the confirmation of Thursday’s closing price reversal bottom. The chart pattern won’t change the main trend to up, but it could fuel the start of a 2 to 3 day correction.

A trade through .7563 will negate the closing price reversal bottom and signal a resumption of the downtrend. The trade through .7614 shifted momentum to the upside.

The main trend will change to up on a move through .7849.

The minor range is .7849 to .7563. Its 50% level at .7706 is the next potential upside target.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday will likely be driven by trader reaction to .7614.

Bullish Scenario

A sustained move over .7614 will indicate the presence of buyers. If this move creates enough short-term upside momentum then look for the rally to possibly extend into .7706.

Bearish Scenario

A sustained move under .7614 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly lead to a retest of .7563. This is a potential trigger point for an acceleration to the downside with the December 21 main bottom at .7462 the next likely downside target.

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