AUD/USD Forex Technical Analysis – Direction Controlled by Major Retracement Zone at .7252 to .7307

The Australian Dollar is trading lower early Friday, but is still in a position to post a strong close for the week. The Forex pair picked up strength this week on the back of the announcement of a meeting between high-ranking officials of the U.S. and China over the lingering trade dispute. This meeting is expected to set the tone for an end of the month meeting between U.S. President Trump and China leader Xi Jinping at the G-20 summit in Argentina.

At 0516 GMT, the AUD/USD is trading .7269, down 0.0007 or -0.09%.

The Aussie is also being pressured by renewed concerns over Brexit. Underpinning prices is yesterday’s better-than-expected Australian employment data, which raised the chances of an RBA rate high in 2020.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7302 will signal a resumption of the uptrend. This is followed by another main top at .7314, followed by the next main top at .7363.

The main trend will change to down on a trade through .7164, followed by .7020.

The major daily/weekly range is .7484 to .7020. Its retracement zone at .7252 to .7307 is resistance. It stopped the rally last week at .7302. It is essentially controlling the near-term direction of the AUD/USD.

The new minor range is .7231 to .7215. This zone is short-term support.

Daily Swing Chart Technical Forecast

Based on the price action the last six weeks, the direction of the AUD/USD on Friday is likely to be determined by trader reaction to the main retracement levels at .7252 to .7307.

Bullish Scenario

Taking out last week’s high at .7299 and the main top at .7302 will indicate the buying is getting stronger. This could lead to a test of .7307 and .7314.

Crossing to the strong side of the main Fibonacci level at .7307 will put the AUD/USD in a bullish position. The trigger point for an acceleration to the upside, however is the main top at .7314. If this move creates enough upside momentum then look for the rally to extend into the next main top at .7363.

Bearish Scenario

A sustained move under the main 50% level at .7252 will signal the presence of sellers. This could lead to a test of the short-term retracement zone at .7232 to .7215. Since the main trend is up, buyers could come in on a test of this area.