AUD/USD Forex Technical Analysis – January 29, 2019 Forecast

The Australian Dollar is trading slightly higher early Tuesday, recovering from earlier weakness. Traders are showing little reaction to the NAB Business Confidence report which came in unchanged from the previous month at 3.

There has also been little reaction to renewed concerns over the Chinese economy and worries about U.S.-China trade relations after the U.S. Justice Department announced charges against the CFO of Chinese communications giant Huawei.

At 0505 GMT, the AUD/USD is trading .7165, up 0.0001 or -0.01%.

The early two-sided trading could also be position squaring ahead of Wednesday’s quarterly Consumer Inflation report which is expected to come in unchanged at 0.4%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside on Friday with the formation of a closing price reversal bottom and the subsequent confirmation on Monday.

A trade through .7236 will change the main trend to up. A move through .7076 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is up. It turned up on Friday, supporting the shift in momentum. A new minor top was formed at .7205 earlier today. Taking out this level will reaffirm the uptrend. A trade through .7076 will change the minor trend to down and shift momentum to the downside.

The main range is .7394 to .6764. The AUD/USD is currently straddling the upper level of its retracement zone at .7153 to .7079. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .6764 to .7236. If the downtrend resumes then look for a break into its retracement zone at .7000 to .6944.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the Fibonacci level at .7153.

Bullish Scenario

A sustained move over .7153 will indicate the presence of buyers. This could drive the AUD/USD into the downtrending Gann angle at .7199. This angle stopped the rally at .7205 on Monday.

A move through .7199 then .7205 will indicate the buying is getting stronger. This could trigger a surge into the main top at .7236. The main trend will change to up on a move through this level with another main top at .7247 the next target. This price is a potential trigger point for an acceleration to the upside with the next target angle coming in at .7297.

Bearish Scenario

A sustained move under .7153 will signal the presence of sellers. The first target angle comes in at .7124. This uptrending Gann angle has been guiding the AUD/USD higher since January 3. We could see a technical bounce on the first test of this angle, but if it fails then look for a potential acceleration to the downside with the next target the major 50% level at .7079, followed by the main bottom at .7076.