AUD/USD Forex Technical Analysis – January 27, 2020 Forecast

The Australian Dollar is trading sharply lower on Monday. Most of the selling pressure is related to the potential economic impact of the coronavirus that is centralized in China, but starting to show signs of spreading globally. Traders also continue to worry about the impact of the bush fires on Australia’s GDP.

At 08:10 GMT, the AUD/USD is trading .6787, down 0.0039 or -0.57%.

Although last week’s better-than-expected labor market reports apparently took a February rate cut by the Reserve Bank (RBA) off the table, the current price action suggests there are some who believe it’s now a 50/50 proposition, given the fast turn of events.

 Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the December 10 main bottom at .6800. The main trend will change to up on a move through .6934. This is highly unlikely. The only pattern that will indicate even a hint of buying will be a closing price reversal bottom.

The minor trend is also down. A move through .6879 will change the minor trend to up. This will also shift momentum to the upside.

The main range is .6671 to .7032. Its retracement zone is .6877 to .6925. This zone is resistance. Furthermore, trading below this area is helping to contribute to the downside bias.

Daily Technical Forecast

Based on the early price action, downside momentum is driving the trade. This should lead to a test of an uptrending Gann angle at .6772. We could see a pause in the selling pressure on the initial test of this angle. If it fails to hold then look for the selling to possibly extend into the next main bottom at .6754.

Taking out .6754 will indicate the selling is getting stronger. The next targets are a pair of main bottoms at .6724 and .6710, and another uptrending Gann angle at .6722. This is the last potential support area before the .October 2, 2019 main bottom at .6671.

On the upside, the first target is Friday’s close at .6826, followed by a downtrending Gann angle at .6852. This angle has been guiding the AUD/USD lower since December 31.