AUD/USD Forex Technical Analysis – Weekly Chart Strengthens Over .7914, Weakens Under .6871Based on last week’s price action and the close at .6913, the direction of the AUD/USD the week-ending November 8 is likely to be determined by trader reaction to the long-term downtrending Gann angle at .6914.
The Australian Dollar settled higher last after the U.S. Federal Reserve cut its benchmark interest rate 25-basis points while signaling it would take a pause in December. Fed Chair Jerome Powell also added that the central bank would not raise rates until there was a “substantial” rise in inflation.
The Aussie was further boosted by less-dovish chatter from Reserve Bank of Australia Governor Philip Lowe, who signaled the central bank was not leaning toward another rate cut in November after having trimmed rates on October 1.
Finally, upbeat comments from China may be indicating the two economic powerhouses – the United States and China – may be close to making a partial trade deal. Australia is often seen as a proxy for China’s economy.
Last week, the AUD/USD settled at .6913, up 0.0092 or +1.35%.
Weekly Technical Analysis
The main trend is up according to the weekly swing chart. The trend turned up last week when buyers took out the previous main top at .6895. The next potential upside target is the swing top from the week-ending July 19 at .7082.
A trade through .6671 will change the main trend to down. This week is the fifth week up from this main bottom, which means the rally could continue for another two weeks before the AUD/USD will be inside the window of time for a closing price reversal top.
Weekly Technical Forecast
Based on last week’s price action and the close at .6913, the direction of the AUD/USD the week-ending November 8 is likely to be determined by trader reaction to the long-term downtrending Gann angle at .6914.
A sustained move over .6914 will indicate the presence of buyers. If this move creates enough upside momentum, the weekly chart shows there is plenty of room to the upside with the next target the main top at .7082.
A sustained move under .6914 will signal the presence of sellers. The first downside target is an uptrending Gann angle at .6871. Look for a technical bounce on the first test of this angle.
If .6871 fails as support then look for a potential break into the next uptrending Gann angle at .6771.
Some may read the chart pattern as bullish over .6914, bearish under .6871 and chopping in between. That’s perfectly acceptable analysis, but keep in mind that a breakout move is only as good as the volume in its direction. Additionally, the moves are usually accompanied by news and this week, the RBA makes another interest rate decision that could generate some volatility.