AUD/USD Forex Technical Analysis – February 4, 2019 ForecastBased on the early price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at .7204. This Gann angle, moving up at a rate of .002 per day, has been guiding the market higher since January 3 or 22 market days.
The Australian Dollar is under pressure early Monday with the selling fueled by Friday’s robust U.S. Non-Farm Payrolls report and stronger-than-expected U.S. factory activity report.
The strong domestic data highlighted the underlying strength in the U.S. economy despite uncertainty that prompted Fed Chairman Jerome Powell to say last week that “The case for raising rates has weakened somewhat.”
Currently, investors are pricing in zero rate hikes by the Fed in 2019, however, Friday’s solid reports have led investors to trim bets the Fed would need to cut interest rates to support the economy later this year. This is helping to make the U.S. Dollar a more attractive investment and prompting Aussie buyers to trim positions.
At 06:00 GMT, the AUD/USD is trading .7233, down 0.0014 or -0.18%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7296 will signal a resumption of the uptrend. The main trend will change to down on a trade through .7076.
The minor trend is also up. A move through .7138 will change the minor trend to down. This will also shift momentum to the downside.
The short-term range is .7076 to .7296. Its 50% level or pivot at .7186 is the first downside target.
The main range is .7394 to .6764. Its retracement zone at .7153 to .7079 is the major support zone. This zone is controlling the longer-term direction of the Forex pair.
Daily Technical Forecast
Based on the early price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at .7204. This Gann angle, moving up at a rate of .002 per day, has been guiding the market higher since January 3 or 22 market days.
Watch the price action and read the order flow on a test of .7204. Trader reaction to this angle will set the tone for the session. Holding above this angle will indicate the presence of buyers.
If this move creates enough upside momentum then look for a potential rally into the downtrending Gann angle at .7287. This angle stopped the rally last week at .7296. Overcoming it could lead to a test of the next downtrending Gann angle at .7340. This is the last potential resistance angle before the .7394 main top.
Taking out .7204 will signal the presence of sellers. This could drive the AUD/USD into the short-term pivot at .7186. This is followed by the major Fibonacci level at .7153.