Advertisement
Advertisement

AUD/USD Forex Technical Analysis – Short-Sellers Targeting Feb 2016 Low at .6973

By:
James Hyerczyk
Updated: Sep 11, 2018, 06:54 UTC

With the AUD/USD straddling the February 29, 2016 bottom at .7107 and last week’s low at .7098, the direction of the Forex pair this week is likely to be determined by trader reactions to these levels. A sustained move under .7098 will signal that the selling is getting stronger. This will also mean that the AUD/USD is so bearish that traders are willing to sell weakness under a more than 30-month bottom. If this move creates enough downside momentum then look for a possible extension of the break into the February 9, 2016 main bottom at .6973.

AUD/USD

The Australian Dollar closed sharply lower last week. Weighing the Aussie were a number of factors including concerns over an escalation of the trade dispute between the U.S. and China, a dovish Reserve Bank of Australia, emerging market turmoil and stronger-than-expected U.S. economic data, which increased the chances of additional rate hikes by the Fed. Shall I go on?

Last week, the AUD/USD settled at .7106, down 0.0087 or -1.21%.

The downside momentum at the close suggests there is more selling to come. I expect to see a 6-handle some time soon. Any rallies are likely to be short-covering in nature which means bearish traders will be waiting to increase their positions.

AUDUSD
Weekly AUD/USD

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. A trade through .7098 will signal a resumption of the downtrend. A trade through .7484 will change the main trend to up.

The short-term range is .7484 to .7098. Its retracement zone at .7291 to .7337 is the best upside target. Watch for short-sellers to re-emerge on the first test of this zone.

Weekly Swing Chart Technical Forecast

With the AUD/USD straddling the February 29, 2016 bottom at .7107 and last week’s low at .7098, the direction of the Forex pair this week is likely to be determined by trader reactions to these levels.

A sustained move over .7107 will indicate the presence of buyers. It will also mean that some of last week’s selling pressure was exhaustion. This is not likely to lead to a major rally, but just enough to alleviate some of the downside pressure. If buyers can overcome last week’s high at .7235 then don’t be surprised by further short-covering into perhaps .7291 over the near-term. Look for sellers to re-emerge if this occurs.

A sustained move under .7098 will signal that the selling is getting stronger. This will also mean that the AUD/USD is so bearish that traders are willing to sell weakness under a more than 30-month bottom.

If this move creates enough downside momentum then look for a possible extension of the break into the February 9, 2016 main bottom at .6973.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement