AUD/USD Forex Technical Analysis – Up for the Week, but Struggling at .6979 Pivot

The Australian Dollar is edging higher early Friday on position-squaring ahead of the weekend. Despite a steep break on Thursday, the currency remains in a position to post a higher close for the week.

Yesterday, the Aussie was pressured by rising tensions between the United States and China and the fear that rising coronavirus cases will derail the economic recovery. The news weighed on investor sentiment which encouraging investors to seek protection in the U.S. Dollar.

Investors were unfazed by upbeat domestic employment data and better-than-expected GDP data from China. Instead, they chose to focus on the sharp rise in the Australian unemployment rate, which jumped to 7.4 percent in June from 7.1 percent in May, despite the addition of more than 210,000 jobs. This was its highest level since November 1998.

At 05:57 GMT, the AUD/USD is trading .6981, up 0.0009 or +0.13%.

Daily Swing Chart Technical Forecast

The main trend is up according to the daily swing chart. A trade through .7038 will signal a resumption of the uptrend. The main trend changes to down on a move through the last main bottom at .6833.

The minor trend is also up. A trade through .6921 will change the minor trend to down. This will shift momentum to the downside.

The minor range is .6921 to .7038. Its 50% level at .7979 has been controlling the price action the last two sessions.

The short-term range is .7065 to .6777. Its 50% level at .6921 is important support. This level stopped the selling on Tuesday, producing the low for the week.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6981, the direction of the AUD/USD the rest of the session on Friday is likely to be determined by trader reaction to the 50% level at .6979.

Bullish Scenario

A sustained move over .6979 will indicate the presence of buyers. If this move is able to generate enough upside momentum then we could see a breakout over .7038, into the pair of main tops at .7065 and .7082.

Bearish Scenario

A sustained move under .6979 will signal the presence of sellers. This could trigger an acceleration to the downside with the support cluster at .6921 the next likely downside target.

The price cluster at .6921 is also a potential trigger point for an even steeper acceleration to the downside.