AUD/USD Forex Technical Analysis – Short-Covering Rally Will Target .7818

The Australian Dollar closed slightly lower against the U.S. Dollar on Thursday after trading lower most of the session on hawkish-sounding comments by new Federal Reserve Chair Jerome Powell.

On Thursday, the AUD/USD settled at .7756, down 0.0005 or -0.07%.

The AUD/USD gained back most of its earlier losses after U.S. President Donald Trump’s decision to impose tariffs on steel and aluminum took the wind out of the Greenback’s week-long recovery.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Although the price action did not produce a closing price reversal bottom, it did create some upside momentum into the close that could carry over into Friday’s session.

The minor trend will change to up on a trade through .7893. The main trend will change to up on a move through .7988. A trade through .7712 will signal a resumption of the downtrend. This could lead to the start of a prolonged sell-off.

The main range is .7501 to .8135. Its retracement zone is .7818 to .7743. This zone is controlling the longer-term direction of the AUD/USD.

The short-term range is .7988 to .7712. If the short-covering rally continues then its retracement zone at .7850 to .7883 will become the primary upside target. Since the main trend is down, sellers may come in on a test of this zone.

Daily Swing Chart Technical Forecast

Based on Thursday’s close at .7756, the direction of the AUD/USD on Friday is likely to be determined by trader reaction to the main Fibonacci level at .7743.

A sustained move over .7743 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into .7818.

Overtaking .7818 with conviction could lead to a test of .7850 to .7883.

A sustained move under .7743 will signal the presence of sellers. This could lead to a retest of yesterday’s low at .7712. Look for a possible acceleration to the downside if this low fails to hold.