AUD/USD Forex Technical Analysis – Upside Momentum Building with .6925 Next Target

The Australian Dollar finished higher on Friday and for the week after shrugging off dovish minutes of the Reserve Bank of Australia’s (RBA) December monetary policy meeting earlier in the week. The catalyst behind the turnaround was better-than-expected Employment Change and Unemployment Rate reports, which drove down the chances of a February rate cut by the RBA.

On Friday, the AUD/USD settled at .6901, up 0.0016 or +0.23%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6939 will signal a resumption of the uptrend. The main trend will change to down on a move through .6838.

The main range is .7082 to .6671. The Forex pair is currently trading inside its retracement zone at .6876 to .6925. This zone is controlling the longer-term direction of the AUD/USD.

The short-term range is .6939 to .6838. Its 50% level at .6888 is support.

The first intermediate range is .6754 to .6939. Its retracement zone at .6846 to .6825 is additional support.

Daily Swing Chart Technical Forecast

Based on Friday’s close at .6901, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term 50% level at .6888.

Bullish Scenario

A sustained move over .6888 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the main Fibonacci level at .6925, followed by the main top at .6939.

Bearish Scenario

A sustained move under .6888 will signal the presence of sellers. The first downside target is the main 50% level at .6876. This is a potential trigger point for an acceleration into the 50% level at .6846, followed closely by the main bottom at .6838.

Side Notes

The early price behavior suggests traders are getting their buying done before the December 24-25 bank holidays. Only time will tell if they’ll be able to hold onto these gains under the thin volume conditions.