AUD/USD Forex Technical Analysis – July 26, 2019 Forecast

The Australian Dollar is under pressure for a sixth straight session early Friday as the bearish news continues to pile up. The selling started late last week after the Reserve Bank of Australia (RBA) said it stands ready to lower interest rates “if needed”. This raised the chances of a rate cut at its August 6 meeting.

At 08:09 GMT, the AUD/USD is trading .6932, down 0.0022 or -0.31%.

Early Thursday, RBA Governor Philip Lowe said the central bank could keep interest rates at their historical low for a long time. Later that day, a jump in U.S. Treasury yields sent the U.S. Dollar higher against the Aussie as traders reduced the chances of an aggressive rate cut by the Federal Reserve at last week’s policy meeting.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The next downside target is the July 10 main bottom at .6910. Taking out this bottom will reaffirm the downtrend. The main trend changes to up on a trade through .7082. This is highly unlikely, but given the prolonged move down in price and time, we should be watching for a closing price reversal bottom. This chart pattern won’t change the trend, but it will indicate the selling pressure is slowing.

The short-term range is .6832 to .7082. The AUD/USD is currently trading inside its retracement zone at .6957 to .6927. Trader reaction to this zone will set the near-term tone.

On the upside, the nearest major resistance zone is .6972 to .7030.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6932, the direction of the AUD/USD on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at .6927.

Bearish Scenario

A sustained move under .6927 will indicate the presence of sellers. This could lead to a test of the main bottom at .6910.

Taking out .6910 will reaffirm the downtrend. The daily chart indicates there is no support until .6832 so watch for an acceleration to the downside.

Bullish Scenario

A sustained move over .6928 will signal the presence of buyers. Turning higher for the session will put the AUD/USD in a position to post a potentially bullish closing price reversal bottom. This could lead to a test of .6957 and .6967. Look for a potential acceleration to the upside if buyers can overcome .6967.