AUD/USD Forex Technical Analysis – Set Up for Test of Weekly Chart Target at .7030 to .6967

The Australian Dollar finished lower last week, pressured by a surge in U.S. Treasury yields. However, losses were dampened by the hope of a trade deal between the United States and China.

Better-than-expected U.S. Gross Domestic Product data on Thursday boosted Treasury yields, widening the spread between U.S. Government bond yields and Australian Government bond yields, making the U.S. Dollar more attractive asset.

According to comments from government officials, U.S.-China trade negotiations were progressing smoothly, but reaching a deal may take longer than previously expected.

Last week, the AUD/USD settled at .7080, down 0.0048 or -0.68%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through .7296 will change the main trend to up. A trade through .7053 will signal a resumption of the downtrend.

The minor trend is also down. A move through .7053 will indicate the selling is getting stronger. A move through .7207 will change the minor trend to up, while shifting momentum to the upside.

The main range is .7394 to .6764. Its retracement zone at .7079 to .7153 is controlling the near-term direction of the AUD/USD. The Forex pair has been straddling this zone for four weeks.

The short-term range is .6764 to .7296. Its retracement zone at .7030 to .6967 is the primary downside target.

Weekly Technical Forecast

Based on last week’s price action and the close at .7080, the direction of the AUD/USD this week is likely to be determined by trader reaction to the main 50% level at .7079.

Bullish Scenario

A sustained move over .7079 will indicate the presence of buyers. Overcoming the uptrending Gann angle at .7124 will indicate the buying is getting stronger. If this creates enough upside momentum then look for a potential rally into a downtrending Gann angle at .7134.

Overcoming .7134 could drive the AUD/USD into the Fibonacci level at .7153. This is the trigger point for an acceleration to the upside with .7207 the next major upside target.

Bearish Scenario

A sustained move under .7079 will signal the presence of sellers. This could trigger a break into the minor bottom at .7053, followed by the 50% level at .7030. This price is the trigger point for an acceleration to the downside with the Fibonacci level at .6967 the next major target.