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AUD/USD Forex Technical Analysis – Will Need Surge in Volume to Breakout Over .6939

Today is the seventh day up from the last main bottom at .6838, which puts the AUD/USD inside the window of time for a closing price reversal top. Based on this assessment, the direction of the AUD/USD the rest of the session on Thursday is likely to be determined by trader reaction to Tuesday’s close at .6920.
James Hyerczyk
AUD/USD

Optimism over the U.S.-China trade deal continues to bring in enough buyers to underpin the Australian Dollar. However, the buying volume is a little light due to the holiday season, and uncertainty over whether the Reserve Bank of Australia (RBA) will lower interest rates at its policy meeting in February.

At 08:02 GMT, the AUD/USD is trading .6930, up 0.0010 or +0.15%.

The Aussie is being buoyed by optimism over easing trade tensions between the United States and China and signs of recovering global growth. Beijing said on Wednesday it is in close touch with Washington on a trade deal signing ceremony, a day after U.S. President Donald Trump said that the and Chinese President Xi Jinping will have a ceremony to sign the recently struck trade deal.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the last main top at .6939 will signal a resumption of the uptrend after nine sessions of sideways trading. A move through .6838 will change the main trend to down.

The main range is .7082 to .6671. Its retracement zone at .6876 to .6925 is controlling the near-term direction of the AUD/USD. The Forex pair is currently straddling the upper or Fibonacci level of this range at .6925.

The short-term range is .6939 to .6838. Its 50% level at .6888 is also a potential downside target.

Daily Swing Chart Technical Forecast

Today is the seventh day up from the last main bottom at .6838, which puts the AUD/USD inside the window of time for a closing price reversal top. Based on this assessment, the direction of the AUD/USD the rest of the session on Thursday is likely to be determined by trader reaction to Tuesday’s close at .6920.

Bullish Scenario

A sustained move over .6920 will indicate the presence of buyers. Overcoming .6925 will indicate the buying is getting stronger. This could trigger a rally into the main top at .6939.

The main top is a potential trigger point for an acceleration to the upside. We’d have more confidence in this taking place if the volume were back to normal. If the volume remains light then look for the Aussie to inch through this top.

Bearish Scenario

A sustained move under .6920 will signal the presence of sellers. If this move is able to generate enough downside momentum then look for a possible break into .6888. Once again, the low volume could dampen the chances of this move.

A close under .6920 will form the closing price reversal top. If confirmed on Friday, this could trigger the start of a 2 to 3 day correction.

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