AUD/USD Forex Technical Analysis – Key Area to Watch is .7588 to .7575

The AUD/USD posted a two-sided trade on Monday. Early in the session, the Australian Dollar was supported by a weaker U.S. Dollar. Later, it retreated following hawkish remarks from Robert Kaplan, Dallas Fed President, in an essay posted on the central bank’s website.

The U.S. Dollar also got a boost from a tweet on the progress of U.S. tax reform from U.S. President Donald Trump.

Daily Swing Chart Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since November 21. A trade through .7644 will indicate the buying is getting stronger, however, the trend will not change to up until .7729 is taken out.

A move through .7532 will signal a resumption of the downtrend.

The major retracement zone is .7642 to .7527. The market is currently trading inside this range. It is controlling the longer-term direction of the AUD/USD.

The short-term range is .7532 to .7644. Its retracement zone at .7588 to .7575 is a key support area. Aggressive counter-trend buyers are going to try to establish a potentially bullish secondary higher bottom on a test of this zone. If successful, this could lead to a resumption of the short-term counter-trend rally.

A failure to hold .7575 will indicates the sellers have returned. This could lead to a retest of last week’s low at .7532 and the major Fibonacci level at .7527.

Daily Swing Chart Forecast

The direction of the AUD/USD is likely to be determined by trader reaction to .7588 to .7575.

A sustained move over .7588 will indicate the presence of buyers. This could trigger a rally into .7642 to .7644. Taking out .7644 could trigger an acceleration to the upside.

A sustained move under .7575 will signal the presence of sellers. This could trigger a break into .7532 then .7527. This is the trigger point for an acceleration to the downside.