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AUD/USD Forex Technical Analysis – In Position to Post Weekly Closing Price Reversal Bottom

By:
James Hyerczyk
Updated: Jul 4, 2018, 18:01 UTC

Based on Wednesday’s price action, the direction of the AUD/USD the rest of the week is likely to be determined by trader reaction to the downtrending Gann Angle at .7372.

AUD/USD

The AUD/USD is trading lower at mid-week after hitting its lowest level since January 9, 2017 at .7310 on Monday. However, the strong rebound rally from this low has put the market in a position to form a potentially bullish closing price reversal bottom. This makes last week’s close at .7407 the key number to watch the rest of the week.

Also earlier in the week, the Aussie reaffirmed the downtrend when it took out the May 9, 2017 main bottom at .7329. Although a short-covering rally quickly regained this level, suggesting investors weren’t shorting weakness. This leads us to believe the move was fueled by sell stops.

AUDUSD
Weekly AUD/USD

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through .7310 will signal a resumption of the downtrend. The main trend won’t change to up unless buyers can take out .7677, however, there is room to the upside for a short-covering rally.

The short-term range is .7677 to .7310. Its 50% level or pivot at .7494 is the nearest upside target and potential resistance.

The major range is formed by the December 23, 2016 main bottom at .7159 and the January 26, 2018 main top at .8162. Its retracement zone at .7647 to .7532 is another resistance zone.

The combination of the two retracement zones makes .7494 to .7532 a key area to overcome.

Weekly Technical Forecast

Based on Wednesday’s price action, the direction of the AUD/USD the rest of the week is likely to be determined by trader reaction to the downtrending Gann Angle at .7372.

A sustained move over .7372 will indicate the presence of buyers. If this move generates enough upside momentum, we could see a drive into the pivot at .7494, and a downtrending Gann angle at .7517.

A sustained move under .7372 will signal the presence of sellers. This could lead to a retest of .7329 or .7310. If the latter fails then look for a possible acceleration to the downside.

The problem with momentum trading this week is that the volume may be low because it’s a U.S. bank holiday week.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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