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AUD/USD Forex Technical Analysis – July 2, 2018 Forecast

By:
James Hyerczyk
Published: Jul 2, 2018, 10:14 UTC

Based on the early price action and the current trade at .7367, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the pivot at .7386. It’s also a risk-off day with Chinese stock markets down about 2.5 percent. In the U.S., the Dow is down triple-digits. This is helping to drive investors into the safety of the U.S. Dollar and U.S. Treasury yields.

AUD/USD

The AUD/USD is trading lower shortly before the U.S. opening. The Forex pair turned lower after an early attempt to rally failed to draw enough buyers to sustain the move. The catalyst behind the selling pressure is lower demand for higher-yielding assets.

At 0954 GMT, the AUD/USD is trading .7367, down 0.0040 or -0.54%.

Aussie investors are reacting to concerns over an escalation in the trade dispute between the United States and its trading partners, namely China. Tension is growing ahead of a July 6 headline when Washington is due to impose $34 billion of tariffs on Chinese exports. Additionally, two economic surveys over the week-end showed a softening in Chinese manufacturing.

It’s also a risk-off day with Chinese stock markets down about 2.5 percent. In the U.S., the Dow is down triple-digits. This is helping to drive investors into the safety of the U.S. Dollar and U.S. Treasury yields.

AUDUSD
Daily AUD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7326 will reaffirm the downtrend.

The minor trend, which controls momentum, is also down. A trade through .7445 will change the minor trend and momentum to up.

The minor range is .7445 to .7326. Its 50% level or pivot is at .7386. This level appears to be controlling the price action today.

Daily Technical Forecast

Based on the early price action and the current trade at .7367, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the pivot at .7386.

A sustained move under .7386 will indicate that sellers are still pressing the Aussie lower. This could lead to a test of a pair of minor uptrending Gann angles at .7356 and .7341. The latter is the last potential support angle before last week’s low at .7326.

Taking out .7326 could trigger an acceleration to the downside with the next target a long-term uptrending Gann angle at .7283. Look for an acceleration to the downside if this angle is taken out with big selling volume.

A sustained move over .7386 will signal the return of buyers. Short-covering could drive the market into the long-term uptrending Gann angle at .7404.

Overtaking .7404 could trigger a strong short-covering rally with the first target .7445. This isn’t likely to happen unless there is a major shift in investor sentiment and increased demand for higher risk assets.

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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