AUD/USD Forex Technical Analysis – June 3, 2019 Forecast

The Australian Dollar is probably trading higher on Monday for a number of reasons. We could be looking at short-covering and position-squaring ahead of Tuesday’s Retail Sales report or Wednesday’s widely expected Reserve Bank of Australia interest rate cut.

Traders could also be happy with the results of China’s Caixin Manufacturing PMI report that came in slightly higher than expected. However, I think the main reason for the move is plunging U.S. Treasury yields, which are making the U.S. Dollar a less-attractive investment. Traders are betting on a Fed rate cut and are being forced to adjust their positions to the tightening of the spread between U.S. Government bond yields and Australian Government bond yields.

At 08:22 GMT, the AUD/USD is trading .6947, up 0.0011 or +0.15%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The main trend changed to up on a trade through .6939 earlier in the session. The new main bottom is .6899. A trade through this bottom will change the main trend to down.

The short-term range is .7069 to .6864. Its retracement zone at .6967 to .6991 is the first upside target. Sellers could come in on the initial test of this area.

The main range is .7206 to .6864. If the buying extends through .6991 then its retracement zone at .7035 to .7075 will become the next upside target.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the uptrending Gann angle at .6919.

Bullish Scenario

A sustained move over .6919 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into .6967, followed by an uptrending Gann angle at .6974. Overtaking this angle will indicate the buying is getting stronger with the next target the Fibonacci level at .6991. This is the trigger point for an acceleration to the upside.

Bearish Scenario

A failure to extend the rally will signal the return of sellers. If the selling is strong enough to take out .6919 then look for a possible test of the main bottom at .6899. If this price fails then the trend changes to down. This could lead to an eventual break of the next main bottom at .6864, which will send out a bearish signal.