AUD/USD Forex Technical Analysis – Sellers Respecting Major Retracement Zone at .7252 to .7307

Lower demand for risky assets helped pressure the Australian Dollar on Friday. The drop in global risk appetite was primarily fueled by weaker U.S. equity markets and fear of a weakening global economy. Profit-taking and position-squaring ahead of next weekend’s G20 meeting in Argentina also weighed on the Aussie. Traders will be watching for signs on whether the U.S. and China can come to any agreement which would de-escalate their on-going trade dispute.

On Friday, the AUD/USD settled at .7234, down 0.0018 or -0.25%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7338 will signal a resumption of the uptrend. A move through .7164 will change the main trend to down.

Daily Swing Chart Retracement Level Analysis

The main retracement zone resistance is .7252 to .7307. This zone provided resistance last week.

The short-term range is .7020 to .7338. Its retracement zone at .7179 to .7141 is support. Inside this zone is the main bottom at .7164. So we expect buyers to come in and defend the trend on a test of this zone.

Daily Swing Chart Technical Forecast

Based on Friday’s price action, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the 50% level at .7252.

Bullish Scenario

Overtaking and sustaining a rally over .7252 will indicate the presence of buyers. If this generates enough upside momentum then we could see a retest of the Fibonacci level at .7307.

Bearish Scenario

A sustained move under .7252 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into last week’s low at .7202. Taking out this low should fuel a further break into the short-term 50% level at .7179. This is followed by the main bottom at .7164 and the short-term Fibonacci level at .7141.