AUD/USD Forex Technical Analysis – Straddling .7397 Pivot for Four Weeks, Breakout Imminent

The Australian Dollar finished slightly better versus the U.S. Dollar last week. The price action was mostly two-sided. Investors reacted to the escalation of the trade dispute between the United States and China, the divergence between the hawkish U.S. Federal Reserve and the dovish Reserve Bank of Australia and mixed U.S. employment data.

The AUD/USD settled at .7398, down 0.0004 or -0.06%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly chart. A trade through .7677 will change the main trend to up. A move through .7310 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .7465 will change the minor trend to up. A move through .7318 will signal a resumption of the downtrend.

The minor range is .7310 to .7484. Its 50% level or pivot is .7397. Based on four weeks of sideways trading, the direction of the AUD/USD this week is likely to be determined by trader reaction to the pivot.

The main range is .7677 to .7310. Its retracement zone at .7494 to .7537 is resistance.

The major retracement zone is .7532 to .7647. Combining this zone with the main retracement zone creates a resistance cluster at .7532 to .7537.

Weekly Swing Chart Technical Forecast

Based on the price action the last four weeks and last week’s close, the direction of the AUD/USD this week is likely to be determined by trader reaction to the pivot at .7397.

A sustained move over .7397 will indicate the presence of buyers. If this can create enough upside momentum then look for buyers to make a run at minor tops at .7465 and .7484.

Overtaking .7484 will confirm the minor uptrend. This could lead to a test of the 50% level at .7494 and the Fibonacci retracement cluster at .7532 to .7437. The weekly chart will open up to the upside if buyers can take out .7437 with conviction.

A sustained move under .7397 will signal the presence of sellers. This could drive the AUD/USD into the minor bottom at .7318 and the main bottom at .7310.

Taking out .7310 will signal a resumption of the downtrend. This could create the downside momentum needed to challenge the December 23, 2016 main bottom at .7159.