James Hyerczyk
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The Australian Dollar is trading lower late in the session on Friday as investors took profits ahead of the weekend after hitting its highest level since March 19 the previous session. The currency is also in a position to post a higher close for the week. The catalysts behind the Aussie’s strength were lower Treasury yields, a weaker U.S. Dollar, strong domestic labor market data and solid economic data from China.

At 20:00 GMT, the AUD/USD is trading .7732, down 0.0019 or -0.25%.

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Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7761 will signal a resumption of the uptrend. The main trend will change to down on a move through .7586.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is potential resistance. This zone is controlling the near-term direction of the AUD/USD.

The short-term range is .7849 to .7532. The Forex pair is currently trading on the strong side of its retracement zone at .7728 to .7690. This is giving the Aussie a slight upside bias. It’s also potential support.

The minor range is .7532 to .7761. Its 50% level at .7646 is potential support.


Short-Term Outlook

The direction of the AUD/USD into the close on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at .7728.

Bullish Scenario

A sustained move over .7728 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible late session surge into .7761 to .7770. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A failure to hold .7728 late in the session could trigger a break into the short-term 50% level at .7690. This is followed by the minor 50% level at .7646. Since the main trend is up, look for buyers on a pullback into this level. It represents value.

For a look at all of today’s economic events, check out our economic calendar.

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