AUD/USD Forex Technical Analysis – Upside Target .6981, Weakens on Close Under .6947Based on the early price action, the direction of the AUD/USD the rest of the session on Friday is likely to be determined by trader reaction to yesterday’s close at .6947.
The Australian Dollar is trading at a five month high early Friday, driven higher by optimism about the U.S. and China signing an initial trade deal and a jump in gold prices. U.S. President Donald Trump confirmed earlier this week that the pact would be formalized at a signing ceremony, but he did not reveal a date or location.
At 04:15 GMT, the AUD/USD is trading .6955, up 0.0008 or +0.12%.
“We will be having a signing ceremony, yes,” Trump told reporters. “We will ultimately, yes, when we get together. And we’ll be having a quicker signing because we want to get it done. The deal is done, it’s just being translated right now.”
Additionally, speaking in Beijing, Chinese Foreign Ministry spokesman Geng Shuang said both countries were in close contact.
Daily Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was confirmed earlier on Friday when buyers took out yesterday’s high at .6950. A trade through .6838 will change the main trend to down.
A change in trend is highly unlikely at this time, but the AUD/USD is up eight sessions from its last main bottom, which means we should start watching for a closing price reversal top. This won’t change the trend to down, but it could trigger the start of a 2 to 3 day correction.
The main range is .7082 to .6671. Its retracement zone at .6925 to .6876 is controlling the longer-term direction of the AUD/USD. Holding above this zone will continue to generate a strong upside bias.
Daily Technical Forecast
Based on the early price action, the direction of the AUD/USD the rest of the session on Friday is likely to be determined by trader reaction to yesterday’s close at .6947.
A sustained move over .6947 will indicate the presence of buyers. If this move generates enough upside momentum then look for a rally into an uptrending Gann angle at .6981. This angle stopped the rally on December 13. Overtaking .6981 will put the AUD/USD in an extremely strong position that could even trigger an acceleration to the upside.
A sustained move under .6947 will signal the presence of sellers. If this generates enough downside momentum then look for a potential break into the long-term Fibonacci level at .6925, followed by an uptrending Gann angle at .6918.
A close under .6947 will form a closing price reversal top. If confirmed, look for the start of a 2 to 3 day break or 50% correction of the rally from .6838.