AUD/USD Forex Technical Analysis – Next Upside Target Dec. 3 Top at .7394

The Australian Dollar finished higher on Thursday, posting its highest close since December 5. The currency also closed higher for the month and is in a position to settle the week sharply higher. Traders said the strength in the Aussie was provided by a weaker U.S. Dollar, which continued to weaken in response to the dovish Federal Reserve. The currency may have also been underpinned by a positive reaction to China’s official Manufacturing PMI report for January which came in above expectations and higher than the previous month.

At 23:00 GMT, the AUD/USD is trading .7270, down 0.0004 or -0.06%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Wednesday when buyers took out the main top at .7236. It was reaffirmed the same day when buyers drove through the main top at .7247. The main trend will change to down on a trade through .7076.

The minor trend is also up. A trade through .7138 will change the minor trend to down. This will also shift momentum to the downside.

The main range is .7394 to .6764. Its retracement zone at .7153 to .7079 is controlling the near-term direction of the Forex pair. Holding above this zone will help sustain the current upside bias. This zone is new support.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to yesterday’s high at .7296.

Bullish Scenario

Taking out and sustaining a rally over .7296 will indicate the buying is getting stronger. If this move is able to generate enough upside momentum then look for a potential surge into the December 3 main top at .7394.

Bearish Scenario

The inability to overcome .7296 will signal the presence of sellers. This could trigger a minor correction into .7217 or a main correction into .7186.

Closing Price Reversal Top

Due to the prolonged move up in terms of price and time, we could see a closing price reversal top. This won’t be an indication of a change in trend, but it will indicate the selling is greater than the buying at current price levels. Taking out .7296 then closing below .7274 will form this chart pattern.