Advertisement
Advertisement

AUD/USD Forex Technical Analysis – Weekly Pivot at .7936 Controlling Direction

By:
James Hyerczyk
Published: Aug 19, 2017, 21:46 UTC

After taking out the previous week’s low, the AUD/USD came roaring back last week to close higher. It was a volatile week with investors reacting to

AUD/USD

After taking out the previous week’s low, the AUD/USD came roaring back last week to close higher. It was a volatile week with investors reacting to domestic data, Fed minutes, Washington turmoil and geopolitical events.

Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum is trending lower. Last week’s lower-low price action made .8065 a new main top.

Although the Aussie posted a lower-low, high-close, I’m not calling it a major closing price reversal bottom because the Forex pair was only down three weeks from its recent top. The best reversal bottoms usually occur after 7 to 10 day breaks.

A trade through .8065 will signal a resumption of the uptrend. If upside momentum increases on the move then .8162 to .8165 will become the next major target. The move will also make .7807 a new main bottom.

The main range is .7329 to .8065. Its retracement zone is .7697 to .7610. Taking out .7807 will mean the downside momentum is getting stronger. This could lead to an eventual break into the retracement zone.

The short-term range is .8065 to .7807. Its 50% level or pivot is .7936. This price is controlling the near-term direction of the market.

AUDUSD
Weekly AUDUSD

Forecast

Based on Friday’s close at .7926, the direction of the AUD/USD this week is likely to be determined by trader reaction to the pivot at .7936.

A sustained move over .7936 will signal the presence of buyers. This could trigger a surge into the next downtrending angle at .7985. Overtaking this angle will set up the market for a drive into the next downtrending angle at .8025. This is the last potential resistance angle before the .8065 main top.

A sustained move under .7936 will indicate the presence of sellers. The initial break is likely to be labored with potential support at .7929, followed by a support cluster at .7905.

The weekly chart indicates that the trigger point for an acceleration to the downside is .7905. If the selling pressure increases under this area then look for a possible break into last week’s low at .7807.

Taking out .7807 with conviction will likely lead to an eventual break into the major retracement zone at .7967 to .7610.

An uptrending angle also passes through this zone at .7629, making it a valid downside target also.

Watch the price action and read the order flow at .7936 all week. Trader reaction to this level will tell us if the buyers or sellers are in control.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement