AUD/USD Forex Technical Analysis – June 6, 2019 Forecast

The Australian Dollar is trading nearly flat after a steep sell-off on Wednesday. Although there has been no follow-through to the downside following yesterday’s closing price reversal top, the chart pattern and the early price action seem to be indicating building downside pressure.

Traders are showing little reaction to the April trade balance report which showed Australia’s trade balance remains at a near record high of $4.87 billion despite a flat April performance following downward revisions to the last two monthly releases. Traders were looking for a number north of $5.00 billion.

The overall tone in the market this week is being controlled by concerns over a weakening U.S. economy and the increasing possibility of an earlier than expected Fed rate hike. Lower rates would make the U.S. Dollar a less-attractive investment. This is causing bearish Aussie traders to adjust their short positions to the fresh news.

At 06:30 GMT, the AUD/USD is trading .6968, down 0.0002 or -0.03%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top is signaling a shift in momentum to down. A trade through .6962 will confirm the potentially bearish chart pattern.

A move through .7008 will reaffirm the uptrend. A trade through .6899 will change the main trend to down.

The main range is .7206 to .6864. Its retracement zone at .7035 to .7075 is the major upside target area.

The intermediate range is .7069 to .6864. Its retracement zone at .6966 to .6991 is acting like resistance.

The short-term range is .6864 to .7008. A confirmation of the closing price reversal top could drive prices into its retracement zone at .6936 to .6919.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the intermediate 50% level at .6966.

Bullish Scenario

A sustained move over .6966 will indicate the presence of buyers. If this generates enough upside momentum then look for the rally to possibly extend into the intermediate Fib level at .6991. This could trigger a rally into an uptrending Gann angle at .7004. Overtaking this angle will put the AUD/USD in a strong position. This could trigger a further rally into a downtrending Gann angle at .7026, followed by the main 50% level at .7035.

Bearish Scenario

A sustained move under .6965 will signal the presence of sellers. This could trigger an acceleration to the downside with the next target a support cluster at .6936 to .6934.

Overview

We’re likely to see a lot of back and forth trading over the near-term as buyers react to the possibility of a U.S. rate cut and sellers to expectations of another Reserve Bank of Australia rate cut. Most of the price action at this time is being generated by major player position-adjusting.