AUD/USD Forex Technical Analysis – Strengthens Over .7153, Weakens Under .7079

U.S. Federal Reserve Chairman Jerome Powell’s dovish comments combined with optimism over the high-level trade talks between the United States and China on January 7-8, helped send the Australian Dollar higher against the U.S. Dollar last week. The dramatic reversal from a multi-month low suggests investors may be betting on the Fed to reduce the number of projected rate hikes in 2019, and/or a sooner-than-expected end to the lingering US-China trade dispute.

Last week, the AUD/USD settled at .7119, up 0.0080 or +1.14%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum shifted to the upside with the formation of a weekly closing price reversal bottom. If confirmed, this chart pattern could lead to the start of a 2 to 3 week counter-trend rally.

The main range is .7394 to .6764. Last week, the AUD/USD closed inside its retracement zone at .7079 to .7153. Trader reaction to this zone should set the near-term direction of the Forex pair.

Weekly Technical Forecast

Based on last week’s price action and the close at .7119, the direction of the AUD/USD this week will be determined by trader reaction to the 50% level at .7079.

Bullish Scenario

A sustained move over .7079 will indicate the presence of buyers. Overtaking and sustaining a rally over the steep uptrending Gann angle at .7084 will indicate the buying is getting stronger. This could create the momentum needed to challenge the Fibonacci level at .7153.

Taking out .7153 will send another bullish signal with the downtrending Gann angle at .7194 the next target. This is the trigger point for an acceleration to the upside with the next objective another downtrending Gann angle .7294.

Bearish Scenario

A sustained move under .7079 will signal the return of sellers. The weekly chart is wide open under this 50% level with the next target an uptrending Gann angle at .6924.

Basically, look for the AUD/USD to strengthen on a sustained move over .7153. Look for weakness on a sustained move under .7079.