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AUD/USD Forex Technical Analysis – Momentum Shifts to Up on Trade Through .7107

By:
James Hyerczyk
Published: Oct 25, 2018, 03:11 UTC

Based on Wednesday’s close at .7061 and the early price action, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the minor bottom at .7055.

AUD/USD

Risk sentiment is eroding fast, but the Australian Dollar is still holding above its multi-year low reached on October 5. It’s hard to figure out what is supporting the currency. Stocks are plunging in the U.S. and Asia, which tends to put pressure on demand for the Aussie. Flight-to-safety buying is pressure U.S. Treasury yields so I have to conclude that the tightening of the interest rate differential between U.S. Government bonds and Australian Government bonds is behind the support.

At 0308 GMT, the AUD/USD is trading .7080, up 0.0019 or +0.27%.

AUDUSD
Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7160 will change the main trend to up. A move through .7042 will signal a resumption of the downtrend with .6973 the next likely downside target.

The minor trend is also down. A trade through .7107 will change the minor trend to up. This will also shift momentum to the upside.

The main range is .7314 to .7042. Its retracement zone at .7178 to .7210 is the primary upside target. This zone is resistance and currently controlling the longer-term direction of the Forex pair.

The minor range is .7042 to .7160. Its 50% level or pivot at .7101 is controlling the short-term direction of the market. It is currently acting like resistance. Overcoming this level will also be a sign of a shift in momentum to up.

Daily Swing Chart Technical Forecast

Based on Wednesday’s close at .7061 and the early price action, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the minor bottom at .7055.

Holding above .7055 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to go after .7101 to .7107. Momentum begins to pick-up on a rally through .7107. The daily chart shows there is room to run with .7160 the next likely upside target.

Taking out and sustaining a break under .7055 will signal the presence of sellers. The next minor target is .7044, followed by the main bottom at .7042.

If counter-trend buyers stop defending .7042 then we could see a potential acceleration to the downside with the next target the February 9, 2016 main bottom at .6973.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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