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James Hyerczyk
AUD/USD

The Australian Dollar edged higher against the U.S. Dollar on Friday as traders paused from cashing in the latest profits from a spectacular nearly three month rally.

During the Asian trading session, the Australian Dollar and other risk-sensitive currencies gave up ground, before recovering and trading higher against the safe-haven greenback, following a rise in European and U.S. stocks.

At 12:24 GMT, the AUD/USD is trading .6875, up 0.0022 or +0.32%.

Investors had earlier decided to unwind their positions after a rapid build-up of bets on risk assets that had taken off on hopes of further re-opening of the economies of many countries.

The Aussie is probably at a transition point. Prices could rebound to new highs if the current drop in demand for risky assets is considered a corrective move. However, if the rise in COVID-19 cases in the U.S. continues to surge then investors could pare positions in risky assets and this could lead to a steep drop in the Australian Dollar.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7065 will signal a resumption of the uptrend. The main trend will change to down on a trade through .6402. This is highly unlikely but there is room for a normal 50% to 61.8% retracement.

The minor trend is also up. A trade through .6506 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is .7065 to .6800. Its 50% level at .6933 is the next upside target.

The second minor range is .6506 to .7065. Its 50% level at .6785 is potential support.

The main range is .6402 to .7065. Its retracement zone at .6733 to .6655 is the primary downside target.

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Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6875, the direction of the AUD/USD the rest of the session on Friday is likely to be determined by trader reaction to .6933.

Bearish Scenario

A sustained move under .6933 will indicate the presence of sellers. These aggressive counter-trend sellers will try to produce a potentially bearish secondary lower top. This could lead to an eventual change in trend, but right now we’re only looking for a pullback into the series of retracement levels at .6785, .6733 and .6655.

Bullish Scenario

A sustained move over .6933 will signal the presence of buyers. If this is able to create enough upside momentum then look for a possible retest of the main top at .7065.

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