AUD/USD Forex Technical Analysis – When Sellers Return, Weekly Target Will Be .6826

The Australian Dollar finished slightly higher last week on extremely low volume. Traders showed little reaction to the heightened volatility in the U.S. stock markets and the weaker U.S. Dollar. Or maybe, gains were capped by lower demand for risk, and underpinned by falling U.S. Treasury yields. Either way you look at it, the range was pretty tight.

Last week, the AUD/USD settled at .7039, up 0.0007 or +0.10%. Early Monday at 0518 GMT, the Forex pair is trading .7060, up 0.0021 or +0.10%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. Although momentum has been trending lower since the closing price reversal top was formed the week-ending December 7, the main trend didn’t officially turn down until sellers took out .7020 last week.

Last week, the market traded down to .7016 before it closed higher. If a short-term range forms between .7394 and .7016 then its retracement zone at .7205 to .7250 becomes the primary upside target. However, there is going to have to be a serious shift in the fundamentals to generate enough weekly volatility to trigger a rally into this zone.

Weekly Swing Chart Technical Forecast

The Australian Dollar is in an extremely weak position and hovering just above a minor support area at .7020 to .7016. The weekly chart indicates that there is plenty of room to the downside with the January 15, 2016 main bottom at .6826 the next major downside target.

Other than the weaker U.S. Dollar and falling Treasury yields, I don’t see what is holding up the currency. Perhaps investors don’t want to sell weakness and prefer selling rallies. This chart pattern is bearish and it may be just a matter of time before the bottom falls out.

There is some room to the upside, but with the main trend down, sellers will be waiting to sell rallies. Look for an opportunity to sell because the chart indicates the AUD/USD is headed to .6826.