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AUD/USD Forex Technical Analysis – Plenty of Room Under .6967 Fibonacci Level

By:
James Hyerczyk
Published: May 3, 2019, 09:08 UTC

With the AUD/USD trading inside the retracement zone, the direction of the Forex pair today is likely to be determined by trader reaction to the 50% level at .7030 and the 61.8% level at .6967. Trading could be choppy inside this range.

AUD/USD

The Australian Dollar is trading nearly flat on Friday ahead of the release of the U.S. Non-Farm Payrolls report at 12:30 GMT. The report is expected to reveal the U.S. economy added about 180K jobs in April. The unemployment rate is expected to remain at 3.8% and average hourly earnings are expected to show an increase of 0.30%.

While some Aussie traders may be counting down the hours until the NFP report, some may be counting down the days until the next Reserve Bank of Australia (RBA) monetary policy and interest rate decisions on May 7. According to Reuters, 17 of 42 economists polled predict a 25-basis-point easing to help stoke inflation and revive the slumping housing market.

A stronger-than-expected NFP report particularly the wage growth number could hit the Aussie hard today. An extremely weak report could trigger a short-covering rally because this would increase the chances of a Fed cut later in the year.

At 08:50 GMT, the AUD/USD is trading .6998, down 0.0001 or -0.02%.

AUD/USD
Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the previous main bottom at .6988. The main trend will change to up on a move through .7069.

The main range is .7394 to .6764. Its retracement zone at .7079 to .7153 is resistance.

The short-term range is .6764 to .7296. Its retracement zone at .7030 to .6967 is currently being tested.

Daily Swing Chart Technical Forecast

With the AUD/USD trading inside the retracement zone, the direction of the Forex pair today is likely to be determined by trader reaction to the 50% level at .7030 and the 61.8% level at .6967. Trading could be choppy inside this range.

Bullish Scenario

The NFP report is going to have to be weak enough to attract enough buyers to drive the AUD/USD through .7030. If the move gains traction then .7069 to .7079 will become the next upside targets. Given the high expectations of a rate cut next week by the RBA, I don’t think the buying will be strong enough to change the main trend to up.

Bearish Scenario

A strong NFP report should lead to a test of .6967. The daily chart is wide open under this level with the next major downside target the “freak move” low from January 3 at .6764.

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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