AUD/USD Forex Technical Analysis – Looking for Test of .6940 to .6914

Based on the early price action, the direction of the AUD/USD into the close is likely to be determined by trader reaction to the intermediate Fibonacci level at .6967.
James Hyerczyk
Australian Dollar and Coins

The Australian Dollar is trading sharply lower at the mid-session on Friday and in a position to close lower for the week. After posting its second potentially bearish closing price reversal top in four sessions on Thursday, sellers hit the currency hard as a jump in U.S. Non-Farm Payrolls dampened the chances of a Fed rate hike later this month.

At 16:23 GMT, the AUD/USD is trading .6974, down 0.0048 or -0.70%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside on Friday with the confirmation of yesterday’s closing price reversal top. This doesn’t mean the trend is changing to down, but it could lead to a 2 to 3 day counter-trend break.

A trade through .7048 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend officially changes to down on a trade through .6832.

The minor trend is also up. It changes to down on a trade through .6956. This will confirm the shift in momentum to down.

The main retracement zone resistance is .7079 to .7153.

The AUD/USD is currently trading inside the intermediate retracement zone resistance at .7030 to .6967.

The minor range is .6832 to .7048. Its retracement zone at .6940 to .6914 is the next downside target. Since the main trend is up, buyers could come in on a test of this zone.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD into the close is likely to be determined by trader reaction to the intermediate Fibonacci level at .6967.

Bullish Scenario

After a successful test of this week’s low at .6956, a sustained move over .6967 will indicate the presence of buyers. If this can create enough upside momentum then look for a potential surge into the pivot at .7002. The buying will increase over this level with .7030 and .7048 the next likely upside targets.

Bearish Scenario

A sustained move under .6967 will indicate the presence of sellers. This could lead to a test of this week’s low at .6956, followed by the short-term 50% level at .6940. Buyers could come in on a test of this level, but if it fails then look for the AUD/USD to possibly extend into the short-term Fibonacci level at .6914.

The Fib level at .6914 is a potential trigger point for an acceleration to the downside with the next major target coming in at .6832.

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