AUD/USD Forex Technical Analysis – Needs to Hold Above .6236 to Generate Upside Momentum

The Australian Dollar is inching higher on Friday on low holiday volume. The Aussie dollar is being supported by Thursday’s move by the U.S. Federal Reserve to roll out a $2.3 trillion stimulus package to bolster local governments and small and mid-sized businesses in the latest move to keep the U.S. economy intact as the country battles the coronavirus pandemic.

At 17:08 GMT, the AUD/USD is trading .6349, up 0.0011 or +0.17%.

The Aussie is also being underpinned by increased demand for higher risk currencies on optimism that the coronavirus outbreak may be close to reaching a peak in regions that have been hit hard economically, reducing demand for the safe-haven greenback.

Volume is down because the U.S. banks and markets are closed on Friday for the Good Friday holiday.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Wednesday when buyers took out the last main top at .6213. The next main top target is .6685. A trade through .5980 will change the main trend to down.

The main range is .6685 to .5510. Its retracement zone at .6236 to .6097 is now support. Crossing to the strong side of this area is helping to generate an upside bias.

Short-Term Outlook

The AUD/USD should continue to grind higher as long as there is demand for riskier assets. This demand is being controlled by the coronavirus curve. As long as the global curve continues to flatten, the Aussie is likely to remain underpinned, and the U.S. Dollar will continue to be pressured.

Gains in the U.S. Dollar are also likely to be pressured by the flooding of the financial markets by monetary stimulus from the Fed and fiscal stimulus from the U.S. government.

The upside momentum should continue over the near-term as long as the AUD/USD can hold above the 50% level at .6236. We could see another acceleration to the downside if the Fibonacci level at .6097 fails as support.

The main top at .6685 is the next upside target, but don’t expect to see an acceleration into this price. Buyers are still going to have to overcome a pair of downtrending Gann angles, currently at .6445 and .6565.