AUD/USD Forex Technical Analysis – January 14, 2019 Forecast

The Australian Dollar is trading lower on Monday in reaction to weaker than expected trade balance data from China. The news gave long Aussie traders an excuse to book profits after posting a six-session rally.  Let’s face it, traders can’t have it both ways. They can’t be bullish one week on the hopes of a trade deal between the U.S. and China, then bearish the next week because of weak trade data from Beijing.

One reason is that the trade deal represents the future and the trade data the past. This is the reason why I think the Aussie will recover after a short-term setback. Furthermore, the rally was also be driven by a dovish U.S. Federal Reserve and as far as I know, it isn’t planning to change its mind this week.

However, the Aussie will be vulnerable to a drop in demand for higher risk assets if the U.S. government shutdown situation worsens.

At 1347 GMT, the AUD/USD is trading .7194, down 0.0021 or -0.30%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through .7247 will change the main trend to up.

The minor trend is up. This is driving the upside momentum. A trade through .7236 will reaffirm the uptrend.

The main range is .7394 to .6764. The AUD/USD is currently trading on the strong side of its retracement zone at .7153 to .7079. Holding above this zone will help support the upside bias. Consider the retracement zone as support.

Daily Technical Forecast

The AUD/USD is currently trading in between resistance and support.

Bullish Scenario

If buyers return then look for a drive into Friday’s high at .7236. This is followed closely by a downtrending Gann angle at .7244. We could see sellers on the first test of this angle.

Taking out .7247 will change the main trend to up. This could create the upside momentum needed to challenge the next downtrending Gann angle at .7319. This is the last major downtrending Gann angle before the .7394 main top.

Bearish Scenario

If sellers continue to pressure the AUD/USD then look for a break into the Fibonacci level at .7153. Look for support on the first test. If it fails then look for a potential acceleration to the downside with the next major target the 50% level at .7079.