AUD/USD Forex Technical Analysis – Weakens Under .6864, Strengthens Over .6900

Based on the early price action, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the minor bottom at .6864.
James Hyerczyk

The Australian Dollar is drifting lower on Thursday as lingering U.S.-China trade fears continued to weigh on investor sentiment. Investors are also fearing heightened volatility and a “risk-off” trading session due to Brexit concerns, the start of European parliamentary elections and the release of key manufacturing and services data from the Euro Zone.

At 06:07 GMT, the AUD/USD is trading .6875, down 0.0006 or -0.08%.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6864 will signal a resumption of the downtrend. The main trend will change to up on a move through .7069. This is highly unlikely to occur at this time, but there is always the possibility of a closing price reversal top leading to a short-lived counter-trend rally.

The minor trend is also down. A move through .6935 will change the minor trend to up. This will also shift momentum to the upside.

The nearest retracement zone resistance is the Fibonacci level at .6967, followed by the 50% level at .7030.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the minor bottom at .6864.

Bearish Scenario

A sustained move under .6864 will indicate the presence of sellers. If this move creates enough downside momentum then look for an eventual test of the January 3 bottom at .6764.

Bullish Scenario

Holding above .6864 will signal the presence of buyers. The first target is a minor pivot at .6900. Sellers could defend this area on the first test. Overcoming it, however, will indicate the counter buying is getting stronger. This could trigger a further rally into the minor top at .6935. Taking out this level on rising volume could drive the AUD/USD into the Fibonacci level at .6967.

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