AUD/USD Forex Technical Analysis – May 16, 2019 Forecast

The Australian Dollar added to earlier weakness on Wednesday following the release of a disappointing employment report, which increased the chances of a rate cut by the Reserve Bank of Australia (RBA).

The Employment Change showed the economy added 28.4k jobs in April versus a 14.0k forecast. Full-time employment fell 6.3k versus 48.3k prior. Part-time employment rose 34.7k versus -22.6k and the participation rate came in at 65.8% versus 65.7% and 65.7% prior.

The big disappointment was the unemployment rate which rose to 5.2%. Traders were looking for 5.0%, or unchanged from the previous report. The second disappointment was the big jump in part-time employment.

At 01:56 GMT, the AUD/USD is trading .6910, down 0.0018 or -0.27%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The next major downside target is the January 3 main bottom at .6764. The trend will change to up on a trade through .7069.

The minor trend is also down. It will change to up on a move through .7019.

The AUD/USD isn’t close to changing the minor or main trend to up, but due to the prolonged move down in price and time, it is in the window of time for a potentially bullish closing price reversal bottom. We’ll be watching for this today since all the bad news is out this week.

The short-term range is .6764 to .7296. Trading on the weak side of its retracement zone at .6967 to .7030 is bearish. The closest resistance is the Fibonacci level at .6967.

Daily Technical Forecast

Beginning the day in the window of time for a closing price reversal bottom makes yesterday’s close at .6929 the level to watch today.

Bearish Scenario

A sustained move under .6929 will indicate the presence of sellers. If the downside momentum continues then look for a further decline into the uptrending Gann angle at .6883. We could see a technical bounce on the first test of this angle, but if it fails then look for a potential acceleration into the next major uptrending Gann angle at .6823. This is the last potential support angle before the .6764 main bottom.

Bullish Scenario

Overtaking and sustaining a rally over .6929 will signal the return of buyers. This will put the AUD/USD in a position to post a closing price reversal bottom. If confirmed, this could lead to a 2 to 3 counter-trend rally. The first upside target is the short-term Fibonacci level at .6967.