AUD/USD Forex Technical Analysis – Trade Through .7533 Confirms Friday’s Closing Price Reversal Bottom

The Australian and New Zealand Dollars posted a dramatic closing price reversal bottom on Friday in a move that may have signaled the end to recent sell-off. The price action suggests exhaustion with sell-stops likely blowing out the last of the longs. The reversal to the upside may have trapped a lot of short-sellers at extremely low levels. This could help fuel a near-term short-covering rally.

On Friday, the AUD/USD settled at .7526, up 0.0055 or +0.74%.

The Aussie was also boosted by a weaker U.S. Dollar which slipped from a three-month high on Friday, weighed down by some of the weaker details of what was an overall strong U.S. non-farm payrolls report for June.

Data showed that U.S. non-farm payrolls did beat expectations, increasing by 850,000 jobs last month after rising 583,000 in May. But the unemployment rate rose to 5.9% from5.8% in May, while the closely-watched average hourly earnings, a gauge of wage inflation, rose 0.3% last month, lower than the consensus forecast for a 0.4% increase.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum may be getting ready to shift to the upside following Friday’s closing price reversal bottom.

A trade through .7445 will negate the closing price reversal bottom and signal a resumption of the downtrend.

A move through .7533 will confirm the closing price reversal bottom and shift momentum to the upside. This won’t change the main trend to up, but it could trigger the start of a minimum 2 to 3 day correction. The main trend will change to up on a trade through .7617.

The major support is the long-term retracement zone at .7499 to .7379. This zone stopped the selling at .7445 on Friday.

The minor range is .7617 to .7445. Its retracement zone at .7531 to .7551 is the first upside target.

The short-term range is .7776 to .7445. Its retracement zone at .7611 to .7650 is a second upside target.

The intermediate range is .7891 to .7445. If the main trend changes to up then its retracement zone at .7668 to .7721 will become the primary upside target.

The most likely upside target is the support cluster at .7650 to .7668.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7531.

Bearish Scenario

A sustained move under .7531 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into .7499, followed by .7489 and .7445.

Bullish Scenario

A sustained move over .7531 will signal the presence of buyers. Taking out .7533 will confirm the reversal bottom. This could trigger a move into .7551. This is a potential trigger point for an acceleration into .7611, followed by .7617 and .7650.