AUD/USD Forex Technical Analysis – Trader Reaction to .7884 Will Determine Direction Today

The AUD/USD posted a two-sided trade on Thursday. The Forex pair rallied early in the session on better-than-expected labor market data and reduced chances of a Fed rate hike later in the year. However, it was ultimately lower demand for higher yielding assets that drove the Australian Dollar lower for the session.

Technical Analysis

The main trend is down according to the daily swing chart. Yesterday’s closing price reversal top is also an indication that the selling is greater than the buying at current price levels.

A trade through .7962 will negate the reversal top and signal a shift in momentum to the upside. However, a rally through .8065 will be needed to change the main trend to up. A trade through the swing bottom at .7807 will signal a resumption of the downtrend.

The main range is .7571 to .8065. Its retracement zone is .7818 to .7760. This zone stopped the selling earlier in the week at .7807, helping to trigger a two-day rally.

The intermediate range is .8065 to .7807. Its retracement zone is .7936 to .7966. This zone stopped the rally on Thursday, triggering the closing price reversal top and setting in motion a possible secondary lower top.

The new short-term range is .7807 to .7962. Its retracement zone at .7884 to .7866 is the new downside target. Trading could get volatile on a test of this area because aggressive counter-trend buyers are going to try to form a potentially bullish secondary higher bottom while aggressive trend trader are going to try to drive the market through this area in an effort to make .7962 a new main top.

Based on Thursday’s close at .7883, the direction of the AUD/USD today is likely to be determined by trader reaction to the short-term 50% level at .7884.