AUD/USD Forex Technical Analysis – June 5, 2017 Forecast

The AUD/USD closed sharply higher on Friday as investors reacted to the disappointing U.S. Non-Farm Payrolls report. The report showed the headline number coming in well-below expectations and average hourly earnings weaker-than-the-estimate.

Despite missing the headline number, the chances for a Fed rate in June remain at nearly 90 percent. However, traders are raising doubts about the central bank’s ability to raise rates multiple times later in the year. This is the primary reason why the Australian Dollar rallied and the U.S. Dollar plunged. Lower rates makes the dollar a less attractive investment.

Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside on Friday with the formation of a dramatic closing price reversal bottom.

A trade through .7446 will confirm the chart pattern. A move through .7475 will change the trend to up on the daily chart.

The main range is .7329 to .7517. Its retracement zone at .7423 to .7401 is new support.

The short-term range is .7517 to .7372. Its retracement zone at .7445 to .7462 is the primary upside target. Taking out this area will indicate the buying is getting stronger.

Forecast

Based on the momentum into Friday’s close at .7440 there is good chance the rally will continue early in the session. The price action will likely be controlled by the short-term 50% level at .7445.

A sustained move over .7445 will indicate the buying is getting stronger. This could drive the AUD/USD into the short-term Fibonacci level at .7462. This is followed by a downtrending angle at .7472 and the main top at .7475.

Taking out this level will change the main trend to up and could create enough upside momentum to challenge the next downtrending angle at .7495. This is the last potential support angle before the .7517 main top.

The inability to overtake .7445 will signal the presence of sellers. The next target is a cluster of numbers at .7427, .7424 and .7423. This is a critical support area. If it fails to hold then the Aussie could tumble all the way back to .7401.

Watch the price action and read the order flow at .7445 all session. Trader reaction to this level will set the tone for the day.