AUD/USD Forex Technical Analysis – Likely to Test .6921 – .6889 Over Near-Term

The Australian Dollar is trading lower on Friday, pressured by safe-haven demand for the U.S. Dollar after another surge in new COVID-19 cases in the United States raised concerns over a quick economic recovery.

More than 60,000 new COVID-19 infections were reported across the United States on Wednesday, the greatest single-day tally by any country in the pandemic so far, discouraging some American consumers to return to public spaces.

At 04:04 GMT, the AUD/USD is trading .6943, down 0.0020 or -0.29%.

Some speculators also said a U.S. Supreme Court ruling that a New York prosecutor can obtain President Donald Trump’s financial records could have undermined risk sentiment and boosted the greenback’s appeal as a safe-haven as he faces an uphill battle for re-election.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower following the formation of a closing price reversal top on Thursday and its subsequent confirmation earlier today.

A trade through .7001 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at .6833.

The minor trend is also up. A trade through .6922 will change the minor trend to down. This will also shift momentum to the downside.

The first potential support is the 50% level at .6921. The second potential support is the 50% level at .6889.

Daily Swing Chart Technical Forecast

On Thursday, the AUD/USD formed a potentially bearish closing price reversal top. This chart formation was confirmed early Friday when sellers took out yesterday’s low at .6950.

Bearish Scenario

A sustained move under .6950 will indicate the selling pressure is getting stronger. This could lead to a test of the support cluster at .6922 – .6921. Watch for a technical bounce on the first test of this area. If .6921 fails as support then look for the selling to possibly extend into .6889.

Bullish Scenario

Regaining .6950 will signal the return of buyers. The first upside target is a minor pivot at .6966, followed by the main top at .7001.

For a look at all of today’s economic events, check out our economic calendar.