AUD/USD Forex Technical Analysis – Sheer Scale of Recent Gains Encouraging Light Profit TakingTaking out yesterday’s low at .6856 will indicate the presence of sellers. This will make .6983 a new minor top.
The Australian Dollar ran into sellers on Thursday as the size and duration of the current rally tempted speculative buyers to book profits, although there may be more upside potential as global investors rediscover risk. Strength in commodity prices and gains in the world stock markets as more economies re-open have led to improvements in key fundamental drivers.
At 08:57 GMT, the AUD/USD is trading .6901, down 0.0021 or -0.30%.
In economic news, Australian retail sales sank a record 17.7% in April, with collapsing consumption certain to cause the deepest recession since the Great Depression. Additionally, the country’s trade surplus also narrowed 16% in April to A$8.8 billion ($6.07 billion), but still managed to beat forecasts of A$7.5 billion.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .6983 will signal a resumption of the uptrend. The uptrend is safe for now. A trade through .6402 will change the main trend to down.
The minor trend is also up. A trade through .6506 will change the minor trend to down. This will also shift momentum to the downside.
The minor range is .6506 to .6983. Its 50% level at .6744 is the first downside target.
The short-term range is .6402 to .6983. Its 50% level at .6692 is probably the best downside target.
Since the main trend is up, buyers are likely to come in on a test of the 50% levels since they represent value.
Daily Swing Chart Technical Forecast
There isn’t much to analyze on Thursday. A trade through .6983 will signal a resumption of the uptrend. If this creates enough upside momentum then look for a possible move into the July 19, 2019 main top at .7082.
Taking out yesterday’s low at .6856 will indicate the presence of sellers. This will make .6983 a new minor top. If this move is able to generate enough downside momentum then look for a possible extension of the break into .6744 to .6692.
The best sign of a top will be a closing price reversal top chart pattern. In order to form the chart pattern on Thursday, buyers would have to take out .6983 then close lower for the trading session. If confirmed, this could trigger the start of a 2 to 3 day correction, but not necessarily a change in trend.