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AUD/USD Forex Technical Analysis – October 5, 2018 Forecast

By:
James Hyerczyk
Updated: Oct 5, 2018, 11:04 UTC

Based on the early price action, the direction of the AUD/USD on Friday is likely to be determined by yesterday’s close at .7078. A sustained move under .7078 targets .6973. A sustained move over .7078 could trigger a short-covering rally and form a daily closing price reversal bottom.

AUD/USD

The Australian Dollar is inching lower on relatively low volume early Friday. The price action suggests the major players have taken to the sidelines ahead of Friday’s U.S. Non-Farm Payrolls report.

The report, due to be released at 1230 GMT, is expected to show the economy added 185K jobs in September. The unemployment rate is expected to dip to 3.8% from 3.9%. Average Hourly Earnings are forecast to have risen 0.3%.

At 1103 GMT, the AUD/USD is trading .7072, down 0.0010 or -0.14%.

Rapidly rising U.S. Treasury yields have been driving the AUD/USD lower all week. A combination of robust U.S. economic reports and hawkish talk from Fed Chair Jerome Powell have been the catalysts behind the move.

Bullish jobs data could push yields even higher, making the AUD/USD vulnerable to further downside pressure.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The AUD/USD isn’t close to changing the main trend to up. However, today is the seventh day down from the last main top. This puts the Forex pair in the window of time for a closing price reversal bottom.

Daily Technical Forecast

Based on the early price action, the direction of the AUD/USD on Friday is likely to be determined by yesterday’s close at .7078.

A sustained move under .7078 will indicate the presence of sellers. The first target is a steep downtrending Gann angle at .7034. Crossing to the weak side of this angle will put the Forex pair in an extremely weak position.

If traders continue to follow this angle lower then we should see a test of the February 9, 2016 main bottom at .6973 on October 8 to October 9.

A sustained move over .7078 will signal the presence of buyers. This will also put the market in a position to post a daily closing price reversal bottom. If formed and confirmed then look for a 2 to 3 day counter-trend rally.

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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