AUD/USD Forex Technical Analysis – May 29, 2018 Forecast

The AUD/USD closed higher last week, supported by dovish Fed minutes which helped tighten the spread between U.S. Government bonds and Australian Government bonds, making the Australian Dollar a more attractive investment.

This is expected to be a short-term move. The longer-term outlook is bearish due to the divergence in monetary policy between the hawkish Federal Reserve and the dovish Reserve Bank of Australia.

The main trend is down according to the weekly swing chart. Last week’s higher-high helped make .7412 a new minor bottom. A trade through this bottom will signal a resumption of the downtrend.

The AUD/USD is trading inside a major retracement zone bounded by .7647 to .7532. This zone is controlling the longer-term direction of the Forex pair.

The short-term retracement zone at .7612 to .7659 is acting like resistance. The best short-term resistance is the price cluster at .7647 to .7659.

The main retracement zone and potential upside target is .7773 to .7859.

Weekly Technical Forecast

This week, the direction of the AUD/USD is likely to be determined by trader reaction to the short-term uptrending Gann angle at .7532. This price is also a major Fibonacci level.

A sustained move over .7532 will indicate the presence of counter-trend buyers. This could drive the Forex pair into a downtrending Gann angle at .7572. This angle stopped the rally last week.

Overtaking the downtrending Gann angle at .7572 and the series of retracement levels at .7612, .7647 and .7659 could lead to a test of the next downtrending Gann angle at .7692.

Look for an acceleration to the upside if buyers can overcome .7692. This could trigger a move into another potential resistance cluster at .7773 to .7775.

A failure to hold the uptrending Gann angle at .7532 will signal the return of sellers. This could lead to a test of the next uptrending Gann angle at .7472. This is the last potential support angle before the .7412 main bottom.

If .7412 fails as support then look for the selling to extend into the May 9, 2017 main bottom at .7329.