AUD/USD Forex Technical Analysis – Support Cluster at .6894 to .6892The close over the support cluster formed by the pair of Gann angles at .6892 and .6894 along with the 50% level at .6893 was impressive. If traders continue to respect this area as support then look for a possible rally into at least .6925.
The Australian Dollar surged to the upside on Friday and finished the session higher in the wake of a weaker-than-expected U.S. jobs report. Optimism over the impact of the U.S.-China trade deal may have also played a role in encouraging short-sellers to book profits after a steep five-day sell-off. The two economic powerhouses are expected to sign the deal on January 15.
On Friday, the AUD/USD settled at .6900, up 0.0042 or +0.61%.
Despite the higher close and the possibility of a follow-through rally on Monday, traders expect gains to be limited. The bush fires are wreaking havoc on the Australian economy, leading some to predict the central bank will be forced to cut interest rates sooner than previously expected.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a move through .6838. A trade through .7032 will signal a resumption of the uptrend.
The main range is .7082 to .6671. The AUD/USD is currently trading inside its retracement zone at .6876 to .6925. This zone is controlling the long-term direction of the Forex pair.
The short-term range is .7032 to .6849. Its retracement zone at .6941 to .6962 is a potential upside target.
Another short-term range is .6754 to .7032. Its 50% level is .6893.
Daily Gann Angle Technical Analysis
On Friday, the AUD/USD settled on the strong side of a pair of Gann angles at .6892 and .6894.
If the rally continues then the next upside target is the downtrending Gann angle at .6962.
If the selling pressure is strong enough to take out .6849 then look for the selling to possibly extend into a pair of uptrending Gann angles at .6846 and .6824.
The close over the support cluster formed by the pair of Gann angles at .6892 and .6894 along with the 50% level at .6893 was impressive. If traders continue to respect this area as support then look for a possible rally into at least .6925.
Taking out .6925 will probably create the momentum needed to challenge the target zone at .6941 to .6962.