AUD/USD Forex Technical Analysis – Sustained Move Over .7532 Could Lead to Test of .7642 to .7647

The Australian Dollar finished lower last week as investors continued to react to the possibility of additional rate hikes later this year. The currency was under pressure early in the week, but reached a low about mid-week after the Federal Reserve released it latest monetary policy statement. This triggered some light short-covering into the end of the week.

The AUD/USD finished the week at .7537, down 0.0042 or -0.55%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. The trend isn’t close to turning up, but there is room for a short-covering rally.

A trade through .7472 will signal a resumption of the downtrend. Due to the prolonged move down in terms of price and time, short-sellers still have to watch for a potential counter-trend closing price reversal bottom.

Taking out .7582 will make .7472 a new minor bottom. This would be the first sign that momentum is beginning to shift to the upside.

Last week, the AUD/USD crossed to the weak side of a key retracement zone at .7532 to .7647. These levels are resistance.  The new short-term range is .7812 to .7472. Its retracement zone at .7642 to .7682 is also a potential upside target.

The combination of the long-term and short-term retracement zones makes .7642 to .7647 a key upside target and potential resistance cluster.

Weekly Swing Chart Technical Forecast

Based on last week’s close at .7537, the direction of the AUD/USD this week is likely to be determined by trader reaction to the long-term Fibonacci level at .7532.

A sustained move over .7532 will signal the presence of buyers. If this move creates enough upside momentum, buyers may make a run at .7642 to .7647, followed by .7682.

A sustained move under .7532 will indicate the presence of sellers. The first downside target is the previous main bottom at .7501, followed by last week’s low at .7472.

The weekly chart indicates there is plenty of room to the downside under .7472 with the next major target the May 9 bottom at .7329.

Watch the price action and read the order flow at .7532 all week. This will tell us if the sellers are still in control, or if buyers have returned.