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AUD/USD Forex Technical Analysis – Strengthens Over .7275, Weakens Under .7242

By:
James Hyerczyk
Published: Sep 11, 2020, 03:30 UTC

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to the 50% level at .7275 and the Fibonacci level at .7242.

AUD/USD

The Australian Dollar is trading higher on Friday amid a slight recovery in the global equity markets and U.S. futures after a reversal to the downside the previous session. Thursday’s price action sends a clear signal to traders that risk sentiment is driving the price action. So what started out as a “risk-on” day, ended as a “risk-off” session.

At 02:52 GMT, the AUD/USD is trading .7268, up 0.0010 or +0.14%.

Stocks opened higher on Thursday, following through to the upside following a strong rebound and higher close the previous session. This sent the signal to traders that risk was on and Aussie traders responded accordingly. The U.S. Dollar was also pressured by a stronger Euro after the European Central Bank (ECB) left policy unchanged and ECB President Christine Lagarde made positive comments.

Stocks began to fall and the U.S. Dollar rose after the news broke that Senate Republicans failed to advance their latest coronavirus stimulus bill.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7414 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest main bottom at .7136.

The minor trend is up. It turned higher on Thursday following a brief downtrend. A move through .7325 will indicate the buying is getting stronger, while a move through .7192 will change the minor trend to down.

The short-term range is .7136 to .7414. The AUD/USD is trying to establish support inside its retracement zone at .7275 to .7242.

The minor range is .7414 to .7192. Its retracement zone at .7303 to .7329 is resistance. This zone stopped the buying at .7325 on Thursday.

On the downside, the major support zone is a retracement area at .7123 to .7055.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD on Friday is likely to be determined by trader reaction to the 50% level at .7275 and the Fibonacci level at .7242.

Bullish Scenario

A sustained move over .7275 will indicate the presence of buyers. This could trigger an acceleration to the upside with the next targets coming in at .7303, .7325 and .7392. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .7242 will signal the presence of sellers. This could trigger a sharp break into the minor bottom at .7192. If this price fails then look for a potential acceleration to the downside with the next target a major retracement zone at .7123 to .7055.

For a look at all of today’s economic events, check out our economic calendar.

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.

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